In a significant move to bolster the country’s energy security and transition toward cleaner power generation, the Ceylon Electricity Board (CEB) has signed a Power Purchase Agreement (PPA) for the Sahasdanavi Power Plant, a 350MW combined cycle facility that will operate on Re-Liquefied Natural Gas (R-LNG).
The Sahasdanavi Power Plant, which will be built, owned, and operated by Sahasdanavi Company Limited, is expected to begin supplying electricity to the national grid within 30 months. The plant’s full combined cycle operations will commence 12 months after the initial launch. At the end of a 25-year operational period, ownership of the plant will be transferred to the CEB. The project has been approved by the Public Utilities Commission of Sri Lanka and construction is set to begin shortly.
Once operational with R-LNG, the generation cost of the Sahasdanavi plant is projected to be around Rs. 37 per unit. Its flexible nature allows it to operate on demand, particularly at night and during periods of reduced wind speeds, making it an essential addition to help balance the fluctuations of solar and wind power.
This initiative is part of a broader strategy to fully convert all existing diesel-based power plants to R-LNG by 2028. The foundation for this transition was laid in December 2024, when the government approved the establishment of Sri Lanka’s LNG supply infrastructure, jointly developed by the CEB and the Ceylon Petroleum Corporation (CPC). The infrastructure plan includes a Floating Storage and Regasification Unit (FSRU), extensive R-LNG pipelines, and supply systems designed to serve both power plants and industrial consumers.
While Sri Lanka’s renewable energy generation capacity currently exceeds peak demand, only about 55 percent of the country’s electricity is derived from renewables due to the seasonal and variable nature of hydro, wind, and solar sources. The Sahasdanavi project is expected to play a key role in bridging this gap, providing consistent and responsive power generation that complements the nation’s renewable energy ambitions.