Nearly two weeks after the previous year’s long-term coal tender closed, the Lanka Coal Company (LCC) is still struggling to initiate the tender process for 2025/26. Officials have now confirmed that the tender will only be issued by mid-August, raising concerns over potential disruptions to Sri Lanka’s coal-fired electricity supply in the coming months.
The 2024/25 tender officially closed on 8 July last year, following multiple extensions. However, the procurement process for the new period has yet to commence, despite coal stockpiles expected to be depleted by January.
Sources told The Sunday Morning that while 15 shipments remain under the existing long-term tender, current coal reserves are projected to run out by November. Even with the pending shipments, supply is estimated to last only until January 2026.
The situation is further complicated by the ongoing rolling maintenance at the Norochcholai Coal Power Plant, which generates nearly 900 MW—approximately 40% of the country’s total power capacity. The third generator was taken offline on 13 June for a 25-day maintenance period, temporarily removing 300 MW from the grid. Following its return, the first generator is scheduled for maintenance, prolonging the partial outage until at least November.
Despite months of delay, the Cabinet only approved the appointment of a tender committee last week. The LCC is now expected to release the tender by mid-August for the supply of 2.25 million metric tons of coal, covering two unloading seasons.
Unlike previous years, the LCC plans to adopt a 50/50 procurement strategy—sourcing half the annual requirement through the long-term tender, with the remainder obtained via spot tenders.
According to Ceylon Electricity Board (CEB) data, on Friday (25), Sri Lanka’s total power generation reached 49.10 GWh. Thermal coal plants contributed 11.65 GWh, or 23.73% of the daily output. The Mahaweli Hydro Power Complex provided the largest share at 12.32 GWh (25.10%), while the Laxapana and Samanala Hydro Complexes contributed 14.7% and 6.25%, respectively.
Despite an increase in renewable energy, coal remains a vital base load fuel.
In light of the current coal supply challenges, LCC General Manager Namal Hewage confirmed that 15 shipments remain pending from the previous tender. He stated that the procurement process has now officially begun and a new tender is expected to be floated by mid-August, covering approximately 2.25 million metric tons of coal.
“Once deliveries commence, coal shipments will arrive every five days,” Hewage said, adding that this schedule would adequately meet national demand for around five months, extending supply until January.
He also noted that the Norochcholai Power Plant, currently undergoing maintenance until November, has sufficient planned coal quantities to ensure uninterrupted operation during the upcoming weeks.
The LCC explained that the procurement process begins with the CEB issuing the annual coal requirement, followed by quarterly planning. The Ceylon Shipping Corporation Ltd. (CSCL) and suppliers coordinate vessel laycans, loading, and documentation. The LCC then facilitates Letter of Credit (LC) applications through banks licensed by the Central Bank.
Upon vessel arrival at Norochcholai anchorage, health and Customs inspections are conducted before coal discharge. Necessary documents—including insurance certificates, survey reports, and invoices—are submitted for CEB payment authorization. Charges related to lightering, port authority, and quality testing are reimbursed once payments are released.
Adjustments to the annual coal requirement are made by the CEB based on power plant performance, with updated shipping schedules communicated to suppliers accordingly.
