Colombo: Sri Lanka made a significant decision on Friday, awarding the construction of three solar and wind hybrid power generation facilities to an Indian company after cancelling a tender won by a Chinese firm.
India has long expressed concerns about the expanding Chinese influence in the island nation, strategically positioned near crucial global shipping lanes and considered within India’s sphere of influence.
The project, initially backed by an Asian Development Bank (ADB) loan, faced a hiatus two years ago when India voiced apprehensions regarding China’s involvement.
Sri Lanka’s energy ministry announced on Friday that the project had been revived, now fully financed by an $11 million grant from the Indian government.
U-Solar, a renewables firm headquartered in Bengaluru, India, secured the construction contract.
In a statement, the Indian embassy highlighted that India’s support “underscores the significance New Delhi attaches to bilateral energy partnership.”
The three facilities, boasting a combined 2,230 kilowatts of renewable energy capacity, will be situated on islets near the northern city of Jaffna, in proximity to India’s southern coast.
China and India have been vying for major infrastructure projects in Sri Lanka, which is grappling with its most severe economic crisis since gaining independence from Britain in 1948.
Beijing stands as Sri Lanka’s primary bilateral creditor, responsible for approximately 10 percent of the island nation’s $46 billion foreign debt at the time of a government default during the height of the crisis in 2022.
