Indian companies have bagged several renewable energy projects in economic-crisis hit Sri Lanka.
The Indian government has offered a line of credit to Sri Lanka to help the island nation navigate through the economic danger it faces. Indian electricity producers are seeking to expand their footprint in Sri Lanka, either through government intervention or direct negotiations with the Sri Lankan government.
Adani Group, one of the largest renewable energy generators in India, recently signed a memorandum of understanding to develop 500 megawatts of renewable energy projects in Mannar and Pooneryn provinces. The group is expected to invest $ 500 million to establish these projects.
NTPC, India’s largest electricity generation company, and a state-owned entity, recently signed an agreement with Sri Lanka’s electricity supply, Ceylon Electricity Board, to establish a 50-megawatt solar energy project in Trincomalee.
In recent developments, the two governments have signed a memorandum of understanding which will allow Indian companies to establish wind power projects in the northern part of Sri Lanka. These projects had previously been awarded to Chinese companies. But after security concerns were raised by the Indian government, the Sri Lankan government scrapped the contract with the Chinese companies, much to the displeasure of the Chinese government.
Sri Lanka is facing the worst economic crisis since its independence. The country has to pay off $ 4 billion worth of debt this year and had only $ 2.3 billion in foreign exchange reserves in February. India has already approved a $ 1 billion credit line and is reportedly in negotiations to offer an additional $ 1.5 billion. India also extended a $ 400 million currency swap and a $ 500 million credit limit for fuel imports from Sri Lanka. The island nation has also sought a $ 2.5 billion credit line from China.