CDB provides loan for Kalawa Aragam 10MW Biomass Power Plant Project

On January 19, 2018, Beijing Full Dimension Power Tech Company Ltd, Nanjing Turbine and Electric Machinery Group Company Ltd, and Sri Lanka's IMS Holdings created a special purpose vehicle and joint venture called Green Watts (Pvt) Ltd. The Jiangsu Branch of China Development Bank subsequently issued a loan to Green Watts (Pvt) Ltd. (建的斯里兰卡绿能电力有限公) for the Kalawa Aragam 10MW Biomass Power Plant Project. The borrowing terms of the loan are unknown. However, it is known that the borrower was to use the proceeds of the loan to partially finance a $24 million commercial (EPC) contract with Nanjing Turbine Power Station Engineering Design Institute Co., Ltd. The purpose of the project is to construct a 10MW biomass (dendro) power plant in Kalawaaragama within Moneragala district. The power plant will generate electricity from sustainably grown biomass (fuel wood) and the the fuel will be produced from the wood from Gliricidia Sepium trees. The power plant will consist of six biomass boilers and three steam turbine generators as the core of the power generation system. The cooling system will use ground water supplemented by large-scale rain water collection. All stack emissions will be cleared by state-of-the-art electro-static precipitators to meet the current emission standards of the Central Environment Authority. There is no liquid waste generated and the boiler blow down water and sewerage will be treated before being discharged. The ash generated, being a source of fertility, will be collected and offered to the suppliers of fuel wood to enrich the soil in their farms. Nanjing Turbine Power Station Engineering Design Institute Co., Ltd (NTCE or 南京汽轮电力工程设计院有限公司) — a subsidiary of Nanjing Turbine and Electric Machinery Group — is the EPC contractor responsible for implementation. However, there is also evidence that COSCO Shipping Project Logistics Co. Ltd and Advantis Projects were involved in implementation (as logistics solutions providers that shipped the power plant equipment and machinery from the Port of Shanghai). A consignment of cargo (including power plant equipment and machinery) arrived in the Port of Hambantota in April 2018. However, construction did not commence until December 2018. The project has faced implementation delays due to complaints of local pollution by nearby residents. The power plant was originally expected to be in operation by the end of September 2018. It was ultimately certified by Ceylon Electricity Board (CEB) on December 31, 2018. It then went into commercial operation on January 1, 2019.

Additional details

1. This project is also known as the 10MW Dendro Power Plant Project. The Chinese project title is 在斯里兰卡KALAWA ARAGAM 10MW生物质电厂项目 or 南汽轮斯里兰卡生物质电厂 or 轮斯里兰卡生物质电厂 or 10兆瓦卡拉瓦拉加马生物质发电站 or 卡拉瓦拉加马生物质发电站. The Sinhala project title is දැව ඉන්දන තාප බලාගාරය or ග්ලිරිසීඩියා දැව ඉන්දන තාප බලාගාරය. 2. For time being, AidData assumes that the loan issued by CDB was a buyer’s credit and it was used to finance 85% of the cost of the $24 million project (commercial contract) in 2018. 3. Beijing Full Dimension Power Tech Company Ltd is a company with many years of experience in development and operation of biomass and other power plants across many countries. Nanjing Turbine and Electric Machinery Group Company Ltd is one of the largest steam turbine manufacturers in China. Advantis Projects is the market leader in providing heavy lift project logistics solutions to local and international contractors who are involved in large-scale infrastructure development projects in Sri Lanka.

Number of official sources

6

Number of total sources

20