Sri Lanka awards energy deal to India after scrapping tender won by China

Its a major win for India over China, as Sri Lanka has scrapped an energy tender won by a Chinese firm and awarded the construction of three solar and wind hybrid power generation facilities to an Indian company.

Initially, the project was financed through Asian Development Bank (ADB). Then, it was temporarily shelved for two years ago after India raised concerns over China’s involvement.

However, on Friday, Sri Lanka’s energy ministry announced that the project had been revived and was now fully funded by an $11 million Indian government grant.

U-Solar, a Bengaluru-based Indian renewables company has been awarded the contract for the construction. The three facilities will have a combined capacity of 2,230 kilowatts of renewable energy and will be located on islets near the northern city of Jaffna, which is close to India’s southern coast.

The Indian embassy in a statement said India’s assistance “underscored the significance New Delhi attached to bilateral energy partnership.”

India: a committed partner! HC @santjha & Hon.State Minister Indika Anuruddha witnessed contract signing of the Hybrid Renewable Energy Project in Nainativu, Analaitivu & Delft islands, off Jaffna. This grant project by 🇮🇳 addresses energy needs of the people of the 3 islands. pic.twitter.com/HLU66KnYN1

— India in Sri Lanka (@IndiainSL) March 1, 2024

Both India and China have been competing for major infrastructure projects in Sri Lanka, which is emerging from its worst economic crisis since independence from Britain in 1948.

India has long been concerned about China’s growing influence in Sri Lanka, which sits near key global shipping lanes and which India considers to be within its sphere of influence.

China is also Sri Lanka’s single largest bilateral creditor, accounting for around 10 per cent of the island nation’s $46 billion foreign debt at the time of a government default at the peak of the crisis in 2022.

With inputs from AFP