Sri Lanka has one coal power generation facility and its creating significant impact on the terrestrial and marine biodiversity of the country. Still policy makers consider coal as a good option as initial capital investment  and per unit cost of production is lower than other options available for the country. The ‘cheap’ image for coal has been created by lobby groups who neglect the social and environmental costs associated with the coal power production. BIOFIN works with the Public Utilities Commission of Sri Lanka (PUCSL) to understand the market externalities associated with coal power production. Objective of this exercise is to increase awareness on the actual impact of coal on the country and therefore advocating a comprehensive costing formula to be adopted in decision making process related to future power generation plans preparation.