Fresh discussions between India and Sri Lanka on moves to go for a Liquefied Natural Gas (LNG) power plant commenced last Thursday (19) with a final decision expected to be reached within a month.

Sri Lanka had earlier cancelled plans of establishing a coal power plant owing to protests and concerns raised on possible environmental impact.

Accordingly, discussions were held between the officials of Sri Lanka’s power and Renewable Energy Ministry and the National Thermal Power Corporation Ltd. (NTPC) of India at the Ministry premises.

President Maithripala Sirisena had discussed the possibilities of replacing the proposed coal-power plant with the LNG power plant with Indian Prime Minister Narendra Modi when he visited India last week. Accordingly, the response of the Indian Premier had been positive. “Both the leaders have quickly informed the respective officials and the discussions between the officials of two countries commenced accordingly,” said by Renewable Energy Ministry Secretary Dr. Suren Batagoda told Nation.

Dr. Batagoda said that the NTPC is experienced enough in LNG driven power generation in India and the company had no issues with Sri Lanka opting to replace coal with LNG if both governments came to an understanding.

However, he admitted that the cost to set up the plant would be much more than the coal-power plant and that it would be borne by the Government.

The initial coal-power plant which was expected to generate 500 MW was a joint venture project between the Ceylon Electricity Board (CEB) and the NTPC of India. The project also included a setting up of a 283 km high voltage DC (HVDC) transmission line from Trincomalee to Madurai in Tamil Nadu, comprising 264 km of overland line and 39 km of submarine cable and to connect the grids of two countries.

The proposal was initially brought in 2006, but all the agreements such as Power Purchase, Implementation, BOI, Land Lease and Coal Supply were signed only in October, 2013.