Cabinet of Ministers has green-lighted a proposal seeking to enter into a Power Purchase Agreement with the Australia-based company United Solar Group.

Taking to X (formerly Twitter), Power & Energy Minister Kanchana Wijesekera said through this deal, plans are afoot to invest in a 700MW Solar Power Project with a 1,500MW Battery Energy Storage System.

“The Solar power project will be installed on the surface of the Poonakary Tank in the Killinochchi District, with a Foreign Direct Investment of USD 1,727 Million,” Wijesekera added.

Earlier this year, the Cabinet of Ministers gave the nod to call for Expressions of Interest (EOIs) from prospective investors to develop renewable energy projects with a capacity of 50MW or more in order to support the implementation of expeditious renewable energy development programs in the country.

As such, United Solar Energy Sri Lanka (Pvt.) Ltd., the local subsidiary of United Solar Group, had submitted a proposal to develop a solar power plant of 700MW with a battery energy storage system, at Poonakary Tank, Kilinochchi enabling to provide a power supply of 134MW.

In an earlier statement, the government said the proposed project would be implemented with a total investment of USD 1,727 million, adding that as a 100% foreign direct investment, out of which USD 500 million will be allocated for local project components.

As a part of the proposed project, the project proponent company has proposed to construct 03 barrages around the Poonakary Tank at a cost of USD 13.5 million to prevent the sea water intrusion and to rehabilitate the tank.

Instead, the Northern Provincial Council, the Northern Provincial Irrigation Department and the Department of Agrarian Development have already agreed to provide 1,080 acres of the shallow area of the tank to the said company on a 35-year lease agreement for the installation of the 700 MW solar power plant.

Accordingly, in September, the Cabinet of Ministers gave the approval to accept the project proposal submitted by United Solar Energy Sri Lanka (Pvt.) Ltd. in principle and to appoint a Cabinet-appointed negotiating committee to evaluate the said proposal and submit recommendations.