New Fortress Energy deal Power Minister justifies move

• The American company would acquire only 40 percent shares of West Coast Power Ltd, held by the Finance Ministry

By Kelum Bandara   

Power Minister Gamini Lokuge justified the Finance Ministry’s decision to strike a deal with New Fortress Energy of the United States to develop for LNG (Liquefied Natural Gas) Terminal, Investment into 310 MW Yugadanavi Power Plant, and gas supply to the country’s power plants.   

Making his remarks on the move, he said the establishment of public private partnerships has been envisaged in the government’s policy manifesto, and the government had taken this decision in conformity with it.   
The Minister said the American company would acquire only 40 percent shares of West Coast Power Ltd, held by the Finance Ministry.   

“The local company will hold 60 percent stake,” he said.   
A statement from the company said the Sri Lankan government and the company executed a definitive agreement for New Fortress’ investment in West Coast Power Limited (“WCP”), the owner of the 310 MW Yugadanavi Power Plant based in Colombo, along with the rights to develop a new LNG Terminal off the coast of Colombo, the capital city. As part of the transaction, New Fortress will have gas supply rights to the Kerawalapitya Power Complex, where 310 MW of power is operational today and an additional 700 MW scheduled to be built, of which 350 MW is scheduled to be operational by 2023.  

“This is a significant milestone for Sri Lanka’s transition to cleaner fuels and more reliable, affordable power,” the company said   

 Controversy surrounds the agreement since minor allies such as the Democratic Left Front, National Freedom and Lanka Sama Samaja Party (LSSP) are opposed to the agreement.  

Asked about it , Cabinet spokesman Dullas Alahapperuma said a framework agreement had been signed with New Fortress Energy.  

Alahapperuma who is also the Media Minister said at today’s Cabinet press conference that it was only a concept agreement, and no finality had been reached. He said further discussion was scheduled to take place between Prime Minister Mahinda Rajapaksa and government legislators yesterday in this regard.  
However, he said he took up the position that nothing should be done outside the tender procedure.   

• As part of the transaction, New Fortress will have gas supply rights to the Kerawalapitya Power Complex