A 2.6MW hydro power plant, located close to Hatton, about 100 km east of the Sri Lankan capital city Colombo, is eligible for a five-year tax-free break.

According to the developers of the recently commissioned project, the deficit between supply and demand for electricity exceeds 8% in the island nation, and the government has encouraged private investment in the power sector by granting generous tax-free holidays.

A consortium headed by Mark Marine Services and CF Venture Fund of Sri Lanka commissioned the plant, and the power it generates will be sold to the national grid through the Ceylon Electricity Board.

The deal is based on a 20-year power purchase agreement with Ceylon Electricity Board.

The Industrial Technical Development Board of Sri Lanka conducted feasibility studies for the project.