LVL Energy Fund PLC said two of its wind power plants connected to Norochcholai grid substation were unable to dispatch electricity since July 25 due to an equipment failure at the grid substation.
Sri Lanka experienced a nation-wide power failure on Monday, which extended till late evening in certain parts of the country due to a transmission line failure at the Kerawalapitiya grid substation, where the Ceylon Electricity Board (CEB) has a 300 MW oil-fired power station.
The country is still experiencing daily power cuts to help CEB manage the load.
Norochcholai is a 900 MW coal-power plant situated in the southern end of the Kalpitiya peninsula and the power generated at both Norochcholia and Kerawalapitiya plants are transmitted to the national grid through Kerawalapitiya grid substation.
LVL Energy Fund, a fund set up to make investments in multiple hydro, wind and thermal projects in Sri Lanka, Bangladesh and Nepal has two wind powered power plants in Kalpitiya peninsula— Pawan Danavi and Nala Danavi—which are connected to the national grid via the Norochcholai grid substation.
Each has an installed capacity of 10.2 MW and 5.1 MW.
“From 25th July 2020 onwards all wind power plants including Pawan Danavi and Nala Danavi plants situated in Kalpitiya peninsula and connected to the Norochcholai grid substation were unable to dispatch electricity to the grid due to an equipment failure at the grid substation.
Even at the time of this writing it is unclear when the plants can resume dispatching electricity,” said Sumith Arangala, the company’s Chief Executive Officer on August 12. The company, which holds a portfolio of power plants with a capacity in excess of 140 MW reported earnings of Rs.203.9 million or 35 cents a share for the three months ended June 30, 2020, up from Rs.112.6 million or 19 cents a share for the comparable period last year. Associate company profits surged from Rs.192.4 million to Rs.259.4 million mainly due to the higher contribution that came from the thermal power plant in Feni, Bangladesh, which commenced commercial operations in November 2019.
However the share of profits from the company’s wind power plant, Pawan Danavi reduced considerably due to plant shutdown for maintenance.
“Due to favourable weather conditions that prevailed during the period compared to the same period last year, overall power generation in the hydro power plants increased to 11.3 million units from 7.5 million units last year.
However, power generation in wind power plants during the period recorded a marked decline to 5.7 million units from 12.9 million units last year primarily due to the shutdown of Pawan Danavi plant for maintenance,” Arangala said in an earnings release.
In July, the company made a disbursement of Rs.26.1 million in respect of its investment in Makari Gad Hydro Power project in Nepal. The 10 MW project is expected to commence operations in the latter part of the financial year 2020/21 and the project company, LTL Energy (Private) Limited, under which the plant is being constructed, has entered in to a 30-year power purchase agreement with Nepal Electricity Authority.
LVL Energy last year decided to fund the new investments out of long term debt because market conditions weren’t conducive for equity raising. While the declining borrowing rates in the current context makes a compelling case for the company to tilt towards more borrowings, the company plans to release part of its debt with equity once the equity market conditions improve.
The company in December 2017 raised Rs.1.2 billion in an initial public offering, of which the company allocated Rs.480 million to settle loans and the balance Rs.720 million to be invested in projects. Private equity firm, Lanka Ventures PLC has 57 percent stake in LVL Energy.