Indian Company Gets Sri Lanka’s Renewable Energy Projects Amidst Rising Tensions with China

GG News Bureau
Colombo, 2nd March. Sri Lanka on Friday awarded the construction of three solar and wind hybrid power generation facilities to an Indian company, marking a strategic shift after scrapping a tender previously won by a Chinese firm. This decision comes amidst mounting concerns over Chinese influence in the island nation, with India viewing Sri Lanka as within its sphere of influence due to its proximity to key global shipping lanes.

The project, initially stalled two years ago due to Indian apprehensions about Chinese involvement, has now been revived with full funding from an $11 million grant provided by the Indian government. The contract for building the facilities has been awarded to U-Solar, a renewables firm based in Bengaluru.

The Indian embassy emphasized the significance New Delhi places on bilateral energy partnership, highlighting India’s assistance in financing and executing the project. The three facilities, with a combined renewable energy capacity of 2,230 kilowatts, will be situated on islets near the northern city of Jaffna, close to India’s southern coast.

This development underscores the intensifying competition between China and India for major infrastructure projects in Sri Lanka, particularly as the nation grapples with its worst economic crisis since gaining independence from Britain in 1948.

Notably, Beijing remains Sri Lanka’s largest bilateral creditor, holding approximately 10 percent of the country’s $46 billion foreign debt, a significant factor amid the government’s default during the peak of the 2022 crisis.