Indian companies have bagged multiple renewable energy projects in economically battered Sri Lanka.
The Indian government has offered a credit line to Sri Lanka to help the island country navigate through the economic peril it faces. Indian power generators are looking 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 set up these projects.
NTPC, India’s largest power generation company and a government owned entity, recently signed an agreement with the Sri Lanka’s power utility, Ceylon Electricity Board, to set up a 50 megawatt solar power project in Trincomalee.
In the latest development, the two governments have signed memorandum of understanding which will allow Indian companies to set up wind power projects in the northern part of Sri Lanka. These projects had earlier been allotted to Chinese companies. However, following security concerns raised by the Indian government, the Sri Lanka 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 needs to pay off $4 billion worth of debt this year and had only $2.3 billion foreign reserves as of February. India already approved a $1 billion credit line and is reportedly in talks to offer another $1.5 billion. India also extended a $400 million currency swap and a $500 million credit line for fuel imports by Sri Lanka. The island country has also sought a $2.5 billion credit line from China.