Construction of the power station began in August 1998, and the power station was commissioned three months later on 4 November 1998 in Kankesanthurai, in the Jaffna Peninsula of Sri Lanka.

Despite having an original installed capacity of 19.4 MW, the power station had mostly operated in the 8-15 MW range due to conflict damage caused by artillery fire to the plant (and neighbouring Kankesanthurai Cement Factory) in May 2000.

[1][2][3] Due to the protests and complaints against the high levels of noise of up to 100dB caused by the operation of the Kotte Power Station in the residential area, it was transferred 400 km (250 mi) to its final location at Kankesanthurai in the Jaffna District, in August 1998.

The plant operated only for three months in Kotte - generating a total of 9 GWh prior to transfer.

[4] The Malabe Power Station too faced similar concerns about noise, before changes were made to reduce sound output from 102dB to 49dB.