Sri Lanka Grants Energy Deal to Indian Company After Cancelling Chinese Firm's Tender

Sri Lanka on Friday awarded the construction of three solar and wind hybrid power generation facilities to an Indian company after cancelling a tender won by a Chinese firm. This decision follows the temporary shelving of the project, initially financed by an Asian Development Bank (ADB) loan, two years ago.

This came amid strategic competition for major infrastructure projects in the island nation, which is currently emerging from its worst economic crisis since independence. Beijing, which is also Sri Lanka’s single largest bilateral creditor, accounted for around 10 percent of the island nation’s $46 billion foreign debt at the time of a government default at the peak of the crisis in 2022.

India’s assistance for the energy deal “underscored the significance New Delhi attached to bilateral energy partnership”, the Indian embassy said in a statement. “India: a committed partner! HC @santjha & Hon.State Minister Indika Anuruddha witnessed contract signing of the Hybrid Renewable Energy Project in Nainativu, Analaitivu & Delft islands, off Jaffna. This grant project by India addresses energy needs of the people of the 3 islands,” the Indian mission in Sri Lanka said in a post on X.

The project will consist of work to construct 530 kw of wind power, 1,700 kw of solar power, 2,400 kWh of battery power and a 2,500 kw diesel power system for Delft, Analativu and Nainativu islets, Sri Lanka’s Energy Minister Kanchana Wijesekara said in a statement. Sri Lanka’s energy ministry said Friday that the project had been revived and was now fully funded by an $11 million Indian government grant. It added that renewables firm U-Solar from India’s tech hub of Bengaluru had been awarded the building contract.

The Indian envoy in Colombo Santosh Jha was present at the ceremony. The Sri Lanka Sustainable Energy Authority, the Government of India and the U Solar Clean Energy Systems, a Bengaluru-based company signed the agreement.  India’s assistance to the project for the people of the three islands, which are not connected to the national grid, underscores the significance attached by GOI to bilateral energy partnership as well as the human-centric nature of development partnership, officials said.

Several landmark initiatives such as the power grid connectivity, multi-product two-way oil pipeline are currently under discussion between India and Sri Lanka in the energy sphere, according to a report in NewsFirst.lk, a Sri Lankan news portal. India’s overall development partnership portfolio stands at USD 5 billion with almost USD 600 million being in grants alone, it said.

(With agency inputs)