With China out, Indian firm to build Sri Lanka power project

New Delhi had objected to a Chinese energy project in the location and offered to give grant for the initiative instead of a loan; the Sri Lankan government and U-Solar Clean Energy Solutions sign contract for building hybrid renewable systems

March 01, 2024 02:58 pm | Updated 11:54 pm IST - COLOMBO

New Delhi’s envoy to Colombo Santosh Jha during his recent visits to the hybrid power project site at Sri Lanka’s Nainativu island. Photo: X/@IndiainSL

New Delhi’s envoy to Colombo Santosh Jha during his recent visits to the hybrid power project site at Sri Lanka’s Nainativu island. Photo: X/@IndiainSL

Three years after objecting to a Chinese energy projectin northern Sri Lanka, barely 50 km off Tamil Nadu, India is set to implement a hybrid power project in three islands off Jaffna peninsula with a $11-million grant.

Sri Lanka Sustainable Energy Authority, the Government of Sri Lanka, and Indian company U-Solar Clean Energy Solutions on March 1 signed the contract for building “Hybrid Renewable Energy Systems” in Delft or Neduntheevu, Nainativu and Analaitivu islands off Jaffna peninsula in the island’s north.

“The project, which is aimed at addressing energy needs of the people of the three islands, is being executed through grant assistance from Government of India. The hybrid project combines various forms of energy including both solar and wind, towards optimising capacities,” a press release from the Indian High Commission in Colombo said.

In a post on social media platform ‘X’ thanking the Government of India, Sri Lanka’s Power and Energy Minister Kanchana Wijesekara said: “The project with 530 kw Wind power, 1,700 kw Solar power, 2,400 kwh Battery power and 2,500 kw of stand by diesel power system will be constructed at the 3 Islands by U-SOLAR.” The Bangalore-based company was chosen through a competitive bidding process conducted by the Sri Lankan government for Indian firms, officials said.

The initiative is the third India-backed energy project coming up in Sri Lanka’s north and east. The National Thermal Power Corporation is spearheading a solar venture in the eastern Sampur town, while the Adani Group is setting up renewable energy projects in Mannar and Pooneryn in the north.

The Sri Lankan Cabinet first cleared Sinosoar-Etechwin Joint Venture in China, to execute renewable energy projects in the three islands. The company was chosen through a competitive bid backed by the Asian Development Bank. Concerned by the prospect of a Chinese project very close to India’s southern coastline, New Delhi offered to implement the same project with a grant instead of a loan, and Sri Lanka took it up. A Memorandum of Understanding (MoU) was signed in March 2022, during External Affairs Minister S. Jaishankar’s visit to Sri Lanka. China’s displeasure at the turn of events is no secret. The Chinese Ambassador in Colombo voiced rare criticism of Sri Lankan authorities for suspending the original projects for “unknown reasons” and sending out the “wrong message” to potential investors.

Meanwhile, Sino Soar Hybrid Technology, whose energy project was suspended in Sri Lanka, in December 2021, signed a deal to implement a similar project in the Maldives.

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