Sri Lanka has issued tenders choosing India over China for power projects near Jaffna, shortly after President Ranil Wickremesinghe’s New Delhi trip.
The Ceylon Electricity Board (CEB) recently called for tenders to execute the hybrid power projects in three northern islands of Sri Lanka using a grant of $12 million from India, according to Colombo-based sources.
In January 2021, Sri Lanka had awarded the contract to Chinese firm Sinosar-Etechwin to install a hybrid renewable energy system in Nainativu, Delft or Neduntheevu and Analaitivu islands off the coast of Jaffna, which was later scrapped. But the tender for projects using Indian grants was only issued recently.
New Delhi had raised with Colombo its concerns over Chinese projects close to southern India, sources told ET. Chinese activities in Sri Lanka that have an impact on India’s strategic interests, including the visit by a spy ship last year, have been a subject of regular discussions between New Delhi and Colombo.
Sri Lanka’s decision to drop China from the project led to a rift between the two countries. In 2021-22, the Chinese embassy in Colombo had raised concerns with the then Gotabaya Rajapaksa government. Then power minister Dullas Alahapperuma took the decision to scrap the tender awarded to the Chinese company. The Chinese embassy also tweeted that the suspension of the project was due to a “security concern” from a third party.
India is investing in Sri Lanka’s energy sector with the aim to interconnect the two national grids. The Adani Group has secured project approval to start two wind power plants in Mannar and Pooneryn to generate about 350 MW of power.
During President Wickremesinghe’s July visit here, it was decided to establish a high-capacity power grid interconnection between India and Sri Lanka to enable bidirectional electricity trade between Sri Lanka and other regional countries, including the BBIN (Bangladesh, Bhutan, India, Nepal) countries. Such a grid interconnection has the potential to not only bring down the cost of electricity in Sri Lanka but also help create a valuable and dependable source of foreign exchange for the country.
