Concerns have been raised over the credibility of the new player in the domestic renewable energy industry who recently won a mega solar project, as the company has informed the Cabinet Appointed Negotiating Committee (CANC) that it will arrange a visit to its previous projects once final approval is received.
The Sunday Morning last week reported about the Ministry of Health seeking Cabinet approval for a mega project which will see the roof acreage of over 700 State hospitals and health institutions being rented to a new player – Power Loop (Pvt) Ltd.
Local renewable energy industry sources last week questioned why a rooftop solar generation project of this magnitude, which would attract an annual turnover of around Rs. 5 billion, had been given to a company that had failed to exhibit its performance and previous experience in doing business of similar nature.
Several domestic renewable energy industry companies that spoke to The Sunday Morning on terms of anonymity also alleged that since there was no report of the company in question engaging in the business previously, it lacked adequate experience in the domestic renewable energy sector.
As learnt by The Sunday Morning in the detailed clarifications requested by a letter dated 25 November 2022 over the issues raised by the project committee as per the decision taken at the CANC meeting, the company had agreed to arrange a visit to a completed project upon receiving final approval.
It is also learnt that the company in question had not even been registered with the Sri Lanka Sustainable Energy Authority.
This is another issue which has been highlighted by the industry sources, who question why the unsolicited bidder has been given priority in a field where there are many experienced local businesses.
They claim that entertaining such unsolicited proposals will ultimately result in discouraging the local renewable energy industry from working on State projects.
Furthermore, a policy decision taken by former State Minister of Solar, Wind, and Hydro Power Duminda Dissanayake to charge 15% as roof rent has also been changed to allow the company to enter the local business sector.
According to documents The Sunday Morning has seen, the company has agreed to pay 8% of the revenue generated to the Health Ministry as roof rent. It was learnt that the CANC had previously suggested a roof rent of 17%.
Through the proposed project, which has not obtained Cabinet approval, company turnover of over Rs. 5 billion a year with a capacity of 100 MW is expected in the event the installations are completed. It is also expected that the project will generate an annual output of 141 million kWh, sources told The Sunday Morning.
Meanwhile, when contacted, Health Minister Keheliya Rambukwella said that Cabinet approval had been given to go ahead with the project and that it was a project that had been delayed for several years due to many reasons.
“This proposal was first sent to the Ceylon Electricity Board (CEB). It has been going for about two or three years. It has been going on since Dr. Rajitha Senaratne’s time and then during Pavithra Wanniarachchi’s time [as Health Ministers]. There were issues with the CEB. What happened is that Power and Energy Minister Kanchana Wijesekera took it and the CEB has made its observations and given certain conditions. Subject to those conditions, the Cabinet has approved it. The CEB has laid down seven or eight conditions. Then the Finance Ministry has also laid down certain conditions and subject to that the Cabinet has given the approval,” the Health Minister stated.
When questioned about the investment, the Minister said that as far as he remembered, it was a Chinese investment. “During Pavithra Wanniarachchi’s time, they had had around five or six meetings together with the Minister concerned – Duminda Dissanayake. The minutes are there. This came up during Rajitha Senaratne’s time, but it was dragged on by the CEB.
“I didn’t initiate this; it has been going on for the last five years. The CEB is not in favour of this. By this time we should have had this. It was brought during Rajitha Senaratne’s time. Proposals must have been submitted during that time. They have had four or five meetings. I just did the finishing part,” he said.
(To read more on this, please refer to the article on page 6)