LAUGFS Gas expects early returns on solar power investment

A solar power plant being built in Hambantota by Laugfs Gas is expected to generate the earliest returns of several new investments made by the group, which is diversifying rapidly into sectors with growth potential. Chairman and Group CEO, W. K. H. Wegapitiya said the company’s profit for the quarter ending June 2016 took a “momentary dip” to Rs. 36.5 million from Rs. 325.52 million the previous year due to the cost of borrowings, largely to finance recent investments.

These were, an investment on one of the the largest renewable energy projects in Sri Lanka to generate 20 MW of solar power at Hambantota, an LP gas terminal at Hambantota Port, the purchase of a second LP gas carrier ‘Gas Success’, acquiring the remaining 31% of its subsidiary, Laugfs Gas Bangladesh Limited, and in one of the chain of Anantaya Resorts and Spas, in Pasikudah. “The company is very confident that returns on the judicious investments are imminent in the medium to long term, with the solar power plant expected to generate the earliest returns, by the third and final quarters of the current financial year, closing a considerable gap in profitability,” Wegapitiya said in a statement accompanying the group’s June quarter interim accounts. The solar power plant, on a 90-acre site at Hambantota, is operated by Laugfs Power, a wholly owned subsidiary of Laugfs Gas PLC. Construction work started in February this year and when completed with an estimated investment of Rs. 4.5 to 5 billion, it will add around 34 GWh to the national grid every year.

Laugfs Power also operates mini-hydro power plants at Ranmudu Oya, Balangoda.