COLOMBO: Sri Lanka has awarded the construction of three solar and wind hybrid power generation facilities to an Indian company, following the cancellation of a tender previously won by a Chinese firm.
Concerned about increasing Chinese influence in the island nation, which lies near crucial global shipping lanes and is considered within India’s sphere of influence, New Delhi had raised objections to China’s involvement in the project, initially financed by an Asian Development Bank (ADB) loan.
The project, temporarily halted two years ago due to India’s concerns, has now been revived with full funding from an $11 million grant from the Indian government, according to Sri Lanka’s energy ministry.
U-Solar, a renewables firm based in Bengaluru, India, has been awarded the construction contract. The Indian embassy emphasized that this assistance underscores the significance of bilateral energy partnership.
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.
The competition between China and India for major infrastructure projects in Sri Lanka comes as the country grapples with its worst economic crisis since gaining independence from Britain in 1948.
China is Sri Lanka’s largest bilateral creditor, accounting for approximately 10 percent of the island nation’s $46 billion foreign debt at the time of a government default during the peak of the crisis in 2022.
