CPC mulls Rs.100 bn extra credit to CEB | Daily News


To avoid further power cuts:

CPC mulls Rs.100 bn extra credit to CEB

Electricity consumers, both industry and citizens, facing prospects of erratic power supply from a cash-strapped Ceylon Electricity Board, may gain some reprieve if the directors of the Ceylon Petroleum Corporation (CPC) come to the rescue of the CEB with an enhanced credit limit of up to a thumping Rs. 100 billion for fuel supplies to the Board’s thermal plants. “CPC has decided to enhance the credit limit given to CEB, but it is pending CPC director board approval,” sources told the Daily News. “The directors will meet in two weeks to review this matter.”

The enhanced credit package allowing CPC to restore regular fuel sales to CEB thermal power plants was formulated by Petroleum Corporation managers after the CPC found that, despite a previous commitment by CEB to pay up part of monies already owed to the Corporation, the Board has made no payments thus far.

Earlier this week the debt-burdened CEB had sought a loan from the Bank of Ceylon for Rs.10 Billion to offset the payments owed to CPC. Meanwhile, the CPC has also requested the Electricity Board to settle their payments on a monthly basis. Earlier this month, power cuts were reported across the country after the CPC suspended its fuel supply to the CEB, due to overdue of payments for fuel purchases once the Board debt exceeded the Rs.80 billion credit limit.

Power and Renewable Energy Minister Ravi Karunanayake told the Daily News that the Treasury had not made payments to CPC for over a year. He added that the CPC had given two weeks grace period for the CEB to make payments.

“The CEB is in discussions to borrow 15 billion from the Bank of Ceylon to pay off the CPC,” an official from the Finance Department of the CEB disclosed.

“This will be the first payment to offset the Rs. 80 million. There should be uninterrupted supply of fuel after this.”

Officials from the Petroleum Resources Development Ministry said a decision was reached to re-supply fuel to the CEB until payments could be made within the next two weeks.

“The relevant authorities have been advised to allow for the re-supply to prevent islandwide power outages,” the official said. “Thermal power plants consume more power and if fuel is not continuously supplied, the CEB will be forced to shut down some of these plants which will result in power interruptions.”


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