“Ceylon Electricity Board (CEB) Chairman Ranjit Fonseka and China National Machinery and Equipment Import and Export Corporation representative, Xia Biao signed the MoU,” said a statement from the President’s office on Tuesday.

“Presidents Chandrika Kumaratunga and Hu Jintao witnessed the signing in Beijing,” said the statement.

The first phase of Sri Lanka’s first coal power plant, for which a feasibility study has already been done, is scheduled to begin in October this year.

A second and third phase will start in 2011 and 2012, to expand initial capacity from 300 MW to 900 MW.

The statement from the President’s office says the Norochcholai coal power plant will reduce electricity prices by 13 percent in 2010 and by 32 percent by 2012.

“It is anticipated that under a credit loan scheme the overall electricity charges will come down by as much as 13% in 2010, 22% in 2011 and 32% in 2012,” said the statement.

Until then electricity consumers must brace themselves for a price increase in October, when the CEB increases fixed electricity rates.

Under the CEB’s revised rates from October, the fixed charge on bulk consumption of electricity, will go to Rs 3,000 from Rs 800.

Domestic fixed charges will range between Rs 60 to Rs 240 from the current Rs 30 depending on usage units.

-LBO Newsdesk: LBOEmail@vanguardlanka.com

Agreement to commission Norochcholai coal power plant signed in China, on Tuesday.

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