News

Biomass power producer forced to shut due to CEB’s unpaid arrears

Published

4 years ago

2022/05/22

Sahan Weerasooriya

Company saves country USD 3 mn. Annually

by Ifham Nizam

An independent power supplier to Sri Lanka’s national grid whose supplies could annually save the country Rs 450 Million in energy costs and USD 3 million in foreign exchange has shut down because of huge unpaid arrears owed to it by the Ceylon Electricity Board and because of the very large recent increases in the cost of wood fuel.

Mirigama Dendro Power (MDP) is a 4 MW biomass plant which provides 3.8 MW of power to Sri Lanka’s national grid annually.

“CEB has not paid us from December last year and owes us Rs 194 million” said MDP Chairman Dr. Romesh Bandaranaike.

The price of fuelwood used by the Plant has increased by over 75% because of the recent exchange rate changes and the price increases in diesel, which has prompted many industries to change the fuel used by their boilers, which supply process steam, from diesel to wood.

“Raw wood has increased from Rs 4/kg. to more than Rs 7/kg and wood chips from Rs 7/kg to over Rs 11/kg. At these prices, it is not economical to run the plant. It will only be viable if there is a substantial increase in what we are paid for the energy we supply to the CEB,” Bandaranaike said.

“We need a minimum increase of Rs 7-8 per kWh from the present Rs 26.65 we are paid if we are to meet our costs and service our bank loans.”

He adds: “The tariff formula in our agreement with the CEB is “backward looking with five year past averages.” It was never designed to handle situations like the present with massive inflation.

The Rs 34-35 per kWh that Dr. Bandaranaike has requested is still substantially lower than what it costs the CEB to generate the same energy, which is Rs 41 per kWh using coal and over Rs 70 per kWh using diesel according to him. The plant can generate 28,000,000 kWh annually.

The savings to the CEB by purchasing power from the plant at Rs 34/kWh rather than generating the power itself at an average cost of Rs 50 per kWh would be Rs. 448 million per year.

Since the plant uses local fuel rather than imported coal or diesel, the foreign exchange savings would be in excess of USD three million, if the average fuel cost per kWh for the CEB’s plants whose power will be replaced is Rs 40.

“We owe the banks Rs 610 million in project loans and Rs 100 million in overdrafts. The collateral for these loans is the plant assets. We have asked the banks to take over our plant because we cannot operate it any more,” Bandaranaike said.

“The shareholders are resigned to losing their equity investment which was in excess of Rs 500 million. The banks will also lose their loan funds because no one will want to take over and run the Plant even if it is given at Rs 1.”

“It is a shame that a Plant which can generate power cheaper than the CEB’s coal power plants and also save USD three million in foreign exchange each year will have to be sold for scrap.”

He says that given his long experience with dealing with the CEB – he used to be the CEO of Sri Lanka’s largest small hydro power developer – there is little hope in approaching the CEB to request a revision in their present tariff and expedite payments.

Repeated requests to the CEB for payments of even a portion of their arrears have also fallen on deaf ears.

“They have so many other problems with power cuts due to fuel unavailability, consumer tariffs substantially lower than costs which result in massive losses, and so on. We are a tiny part of the solution and the CEB has no time for us.”

He says that MDP will make one last attempt to save their plant by going along with the banks to the Public Utility Commission and see if they can make “sanity prevail.”

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News

The President’s Fund has been transformed into a people-centred fund – PM

Published

9 hours ago

2026/07/12

Priyan

Prime Minister Dr. Harini Amarasuriya stated that the President’s Fund has been transformed into a people-centred fund and that ensuring equal access to education for all children is a key policy of the Government.

The Prime Minister made these remarks on 11th of July at Temple Trees while participating in the “Sarasavi Diriya Abhiman 2026” programme, organised to recognise students with special needs pursuing university education.

The President’s Fund has decided to provide financial assistance of Rs. 100,000 each to 370 students admitted under the special needs category through the University Grants Commission, and under the first phase of the programme, cheques were presented to 236 students.

Addressing at the event, Prime Minister stated:

“It is the Government’s policy to ensure equal access to education for all children, including those with special needs, such as neurodivergent and those with autism or dyslexia, without leaving any child behind in the education system. Vice-Chancellors and other education authorities bear a responsibility to ensure that the necessary practical accessibility facilities are available to these students within universities. In addition, the Government is taking steps to digitalise the education system through assistive technologies and to develop public transport and physical infrastructure in a manner that is accessible and inclusive for persons with special needs.These students are not a burden to the country; they are valuable human resources capable of contributing to sustainable development. The ultimate objective is to build a civilised society that recognises and respects the value of every individual.

The occasion was attended by the Speaker Dr. Jagath Wickramaratne, Minister of Rural Development, Social Security and Community Empowerment Upali Pannilage, Member of Parliament Sugath Wasantha de Silva, and several others.

[Prime Minister’s Media Division]

News

Thambuttegama Water Supply Project Commissioned by the President

Published

13 hours ago

2026/07/12

Priyan

The Thambuttegama Water Supply Project, which will benefit 91,810 people in the Thambuttegama, Thalawa and Galnewa Divisional Secretariat divisions, was officially commissioned by President Anura Kumara Dissanayake on Friday (10) afternoon .

The project, which was launched under a concessional loan from the China Development Bank (CDB), was suspended between May 2022 and May 2024 due to the country’s debt restructuring process. However, recognising its national importance, the current Government allocated additional funding from the Government of Sri Lanka to successfully complete the project.

Constructed as a long-term solution to the chronic kidney disease that has spread rapidly across the region, the water supply project is also expected to improve the social and economic well-being of local communities.

The project aims to provide 25,000 new household with water connections.

Built at a cost of Rs. 32 billion, the project comprises a water treatment plant with a daily capacity of 18,000 cubic metres, three water towers with a capacity of 1,500 cubic metres each, a 12.75-kilometre water transmission pipeline and a 158-kilometre water distribution network.

Speaking at the event, Minister of Housing, Construction and Water Supply Susil Ranasinghe said:

“The Thambuttegama Water Supply Project, which was declared open today by the President, has the capacity to provide safe drinking water to 25,000 families. The project has been completed at a cost of Rs. 32 billion. It was implemented with the assistance of the China Development Bank, but construction came to a standstill due to the economic crisis experienced in recent years. Over the past two years, we allocated funds through the national budget and have now successfully completed the project.

At the initial stage of the project, concerns were raised over drawing water from the Rajanganaya Reservoir. Farmers protested against the proposal. However, today this project is being commissioned with the blessing and support of the Rajanganaya farmer leaders, who are present here. They presented their concerns to us and we are committed to addressing them.

Their foremost concern was to ensure that no farmer in Rajanganaya would face a shortage of irrigation water as a result of water being diverted for this project. I can assure you without hesitation that there is absolutely no reason for concern. Not even a single drop of water required for agriculture will be denied in order to supply drinking water. This project is, after all, intended to provide clean drinking water to farming families themselves.

They also requested that compensation be paid if cultivation is affected due to any water-related issue. I assure you that there is no cause for concern on that front either. This Government has consistently compensated farmers affected by disasters. We paid Rs. 1.2 billion in compensation for losses suffered by farmers over the past seven cultivation seasons due to the Nilwala saltwater barrier. We also resolved long-standing issues relating to land acquisition under the Yan Oya Project and allocated Rs. 180 million to the District Secretary to compensate the affected landowners. In addition, Rs. 12 billion has been paid in compensation to around 200,000 farmers whose farmlands were damaged by Cyclone Ditwah. Therefore, if farmers suffer any losses or damage to their lands in the future, this Government stands ready to provide compensation.

Another request made by the farming community was the construction of the Ginipetti Bridge if water is to be drawn for this project. We have already allocated Rs. 240 million to build a new bridge capable of accommodating vehicular traffic and foundation work will commence shortly. At the same time, a team of experts has been appointed to determine whether the existing Ginipetti Bridge can be rehabilitated or whether an entirely new bridge is required. Therefore, I assure the farming community once again that we will not allow them to suffer any hardship or loss as a result of this project.”

Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe, Governor of the North Central Province Wasantha Jinadasa, public representatives of the province, Chinese Ambassador Qi Zhenhong, officials of the Ministry of Housing, Construction and Water Supply and the National Water Supply and Drainage Board, together with a large number of local residents, were also present at the event.

[PMD]

News

New Chairman and members appointed to the Public Service Commission

Published

13 hours ago

2026/07/12

Priyan

President Anura Kumara Dissanayake has appointed S. A. Nimal Saranatissa as the new Chairman of the Public Service Commission.

The other members appointed to the Commission are B. Sanath Poojitha, E. R. Weerakoon, R. Ketheeswaran, J. M. R. Jayasundara, E. A. P. N. Edirisinghe, Dr S. A. A. N. Jayasekara and M. H. Mohammed Sameel.

The letters of appointment were presented to the newly appointed Chairman and members by Secretary to the President Dr Nandika Sanath Kumanayake at the Presidential Secretariat Thursday (09) afternoon .

The appointments have been made to fill the vacancies that arose following the expiry of the previous term of office of the Public Service Commission

[PMD]