Spence to sell Embilipitiya power plant
The Aitken Spence Group is in talks with foreign parties in a bid to sell the assets at its Embilipitiya power plant, company sources said. ”The Power Purchase Agreement (PPA) for this plant wasn’t extended. What the Power and Energy Ministry has indicated to us is that this is due to the lower demand for costly oil fired power plants and the country’s increasing power capacity through the rcently added Norochcholai coal power plant,” a company source told the Business Times, adding that the Group is in negotiation with interested parties from India, Pakistan and South Africa. Two 20 Mega Watt (MW) thermal power plants that Spence owned in Matara and Horana were disposed in 4QFY14 and 2QFY15 for the same reason – PPAs weren’t extended. “The Matara plant was sold to an Australian linked party and the Horana plant was sold to a Pakistani buyer,” the source added.
He said that the 100MW Embilipitiya thermal power plant’s PPA ceased in April this year and it would get disposed in the future.
The company’s power sector presently consists of 2.5 MW mini-hydro power plant in Matale and a 3MW wind power plant in Ambewela.
The company’s power sector lagged in performance during the past few quarters due to heavy rainfall and after the drought situation in the previous quarters where the company benefited from, the sector was unable to grow its’ revenues nor its profits owing to lower thermal production where the bottomline dipped largely. However finance costs were largely scaled down during the quarter possibly due to lesser reliance on short term funding for working capital requirements.