Sri Lanka Swaps China And Hands Over Power Projects To India

During EAM S. Jaishankar’s tour to Colombo for the BIMSTEC conference, the two countries signed six memorandums of understanding (MoUs) to engage in energy, maritime security, and infrastructure. India will build hybrid power plants in three islands off the coast of Jaffna, basically eliminating the Chinese proposal that Colombo approved last year. After the project was stripped away from China, India inked an MoU to develop three Sri Lankan wind farms on three islands shared by the two countries.

How did China get this Project in the first place?

In 2019, the Asian Development Bank awarded a Chinese company a $12 million contract to erect wind generators on three islands around the Palk Strait bordering southern India and Sri Lanka.

Why Sri Lanka hand over this project to India?

However, as India raised concerns about Chinese involvement along its coast, the project’s development was interrupted, and the initiative on the islands of Nainativu, Analaitivu, and Delft was eventually shelved. Hovering in the middle for over a year, Lankans decided to give this project to India rather than China because India offered to initiate this project as a permit, not as a loan.

India has promised to give financing in place of the ADB, as per Sri Lankan officials. Last week, Qi Zhenhong, the Chinese embassy to Sri Lanka, underlined Beijing’s disappointment with the project’s cancellation and cautioned that it would send a poor impression to possible global investors.

Other projects finalized between India and Sri Lanka

Meanwhile, India and Sri Lanka have planned to establish a Maritime Rescue Coordination Center (MRCC), indicating further cooperation in the defense field across the two countries. Last Monday, the Cabinet approved the project, which involves Bharath Electronics and a $6 million Indian contribution.

In addition, India will assist in developing fisheries harbors in Point Pedro, Pesalai, and Gurunagar in the Northern Province and Balapitiya, south of the capital Colombo. India will also provide computer labs and smart boards to schools in the southern Galle district, broadening funding for Sri Lanka’s Unique Digital Identity project, and collaborating in diplomacy training.