July 30, Colombo: Sri Lanka Cabinet of Ministers has granted permission to the Central Bank to provide a guarantee of Rs. one billion to People's Bank to open letters of credit worth for importing coal to Sri Lanka.

Sri Lanka expects to import 65,000 metric tons of coal in the first consignment by November this year. The value of this consignment is US $ 7 million.

Sri Lanka wants coal for power generation in Norochcholai coal power plant located in the Northwestern Province.

Coal is supplied to this power plant by a state company named Lanka Coal. (Private) Ltd. was set up in January 2008, and its shares are held by Sri Lanka's Treasury, Ceylon Electricity Board, Sri Lanka Ports Authority and Ceylon Shipping Corporation Limited.

In July last year, Lanka Coal Company (Private) Ltd. invited bids through an advertisement in The Daily Mirror newspaper to supply 2.4 million metric tons of coal for the country's first coal power plant. According to the company the annual requirement of the 300 Mega Watt plant is 2.4 million metric tons.