Sampoor Coal Power Plant (2x250 MW)

Project Highlights:

Sri Lankas second coal fired power plant is being implemented as a 50:50 joint venture
of Ceylon Electricity Board and NTPC Ltd., India.

The JV Company has been incorporated as Trincomalee Power Company Ltd. on 26Sep-2011 in Sri Lanka. Earlier the JV and Shareholder Agreement were signed between
NTPC & CEB on September 6, 2011 in Colombo.

Govt. of India has offered a concessionary line of credit of $200 million to the GOSL to
enable them to fulfil their commitment under the Implementation Agreement, including
with regard to the construction of a jetty at Sampoor and of transmission lines from
Sampoor to Habarana and also the initial equity of the CEB (under the JV Agreement).

Power Purchase Agreement, Implementation Agreement, Board of Investment

Agreement, Land Lease Agreement and Coal Supply Agreement were signed on 7-Oct2013 by relevant parties including GoSL, CEB and the JV Company.

The project will be implemented on Build, Own and Operate (BOO) basis by the said
Project Company.

CEB is the off-taker. The entire power generated will be transmitted to the national grid
through high voltage transmission lines from sampoor through Habarana to the
Veyangoda Grid Substations.

Coal will be imported and supplied by Lanka Coal Company (LCC).

A jetty will be constructed by the Sri Lanka Ports Authority. The jetty will handle not just
equipment but also the coal supplies to the power plant.

500 acres of land will be provided by the GOSL on long term lease basis.
(Actually Sampoor is a war hit area. Till 2007 Sampur as well as the entire district of Trincomalee was a
Tamil dominated area when the military seized it from the Liberation Tigers of Tamil Eelam (LTTE)
militants after heavy fighting and depopulated the area. Since then the authorities have declared
Sampoor a High Security Zone, making it out of bounds for civilians, most of whom now live in refugee
camps in the neighbouring district of Batticaloa.)

GOSL Exemptions for the Project:

The Govt. of Sri Lanka through a notification dtd. 3-Oct-2011, in terms of Strategic
Development Projects Act, has set out following exemptions which shall be applied to the
project company:
a) The Inland Revenue Act
A 25 year corporate income tax holiday period under the above Act commencing
from either the first year in which the company makes taxable profit or 2 years
after commencement of commercial operations, whichever falls first.
The project company shall be exempted from the payment of withholding tax, on
interest paid on foreign loans obtained for capital expenditure, and on technical
fees paid to consultants employed in the project.

The tax on dividend distributed to shareholders out of profits shall be exempted

from income tax during the said 25 years tax exemption period and one year
thereafter.
An eight years tax exemption from PAYE tax shall be applicable for a maximum
number of 5 expats of the project company.

b) The VAT Act

The payment of VAT on the imported as well as local purchases of project related
goods and services, including payment payable to contractors and subcontractors shall not be applicable during implementation/construction period of 5
years.
Import of coal, raw materials and spare parts shall be exempted from the VAT for
a period of 25 years from the date of commencement of commercial operation
c) The Port and Airport Development Levy Act
PAL shall not be applicable during the project implementation/construction period
of 5 years.
Import of coal, raw materials and spare parts shall be exempted from the PAL for
a period of 25 years from the date of commencement of commercial operation.
d) Nation Building Tax Act
NBT shall not be applicable during the project implementation/construction period
of 5 years.
Import of coal, raw materials and spare parts shall be exempted from the NBT for
a period of 25 years from the date of commencement of commercial operation.
e) Finance Act
The payment of construction industry Guarantee Fund Levy shall not be applicable
during the project implementation/construction period of 5 years.
f)

Excise (Special Provision) Act

Import of coal, raw materials and spare parts shall be exempted from the excise duty
payment for a period of 25 years from the date of commencement of commercial
operation.

g) Economic Service Charge (ECS) Act

Import of coal, raw materials and spare parts shall be exempted from the ECS payment
for a period of 25 years from the date of commencement of commercial operation.
h) Customs Ordinance
Exemption from Customs Duty will be applicable to all project related items
including equipment, fuel, construction machinery/materials (but excepting liquid
fuel) excluding coal, raw materials and spare parts, during the project
implementation/construction period of 5 years.
Further import of coal, raw materials and spare parts shall be exempted from the
customs duty for a period of 25 years from the date of commencement of
commercial operation