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Lesson
Experienced foreign investors in power generation have access to private sector technical insurance that sovereign entities may not otherwise have. This is important when technical problems arise that cause major shutdown of operations, as was the case of AKL due to a 2004 fire. Private sector insurance enables unforeseen technical problems to be fixed along with compensation to the insured for revenue loss due to the incident. Foreign investors can leverage important insurance that is often difficult for sovereign entities to acquire.

Project Number: 34912-014
Project Name: AES Kelanitissa Power Project in Sri Lanka
Report Date:
Lesson
Close examination and assessment of real capacity is necessary in analyzing economic and financial benefits for private sector power plant projects supported by ADB. Nameplate capacity needs to be considered in the context of a plant’s capacity factor. No power plant runs 100% of the time, and power plants, like that of AKL, that run on auto diesel fuel will need to shut down routinely for scheduled maintenance. Routine maintenance combined with unscheduled shutdowns lower actual net capacity.

Project Number: 34912-014
Project Name: AES Kelanitissa Power Project in Sri Lanka
Report Date:
Lesson
Risk of lost revenues due to delayed commissioning and unplanned shutdown associated with mechanical failures can be mitigated by requiring expert power plant developers sponsored by ADB to provide more oversight and guidance to construction contractors.

Project Number: 34912-014
Project Name: AES Kelanitissa Power Project in Sri Lanka
Report Date:
Lesson
It is prudent for ADB to consider alternative fuels when appraising the cost and benefits of oil-fired generation plants. Alternative fuels consist of renewable energy sources and thermal fuels, including clean coal options. Private sector support to the power sector is optimized with a comparative analysis of real fuel options.

Project Number: 34912-014
Project Name: AES Kelanitissa Power Project in Sri Lanka
Report Date: