India Takes Over Wind Turbine Project In Sri Lanka Which Was Initially Given To Chinese Firm

A joint statement issued Tuesday after a visit to Colombo by India's foreign minister S Jaishankar said a memorandum of understanding (MoU) had been signed to build the installations.

New Delhi: India has agreed to build three wind farms in Sri Lankan islets between the countries officials said on Tuesday, essentially pushing aside a Chinese firm according to an AFP report. 

The Chinese influence in the area has been a cause of concern for New Delhi. Sri Lanka had given the 12 million dollar project to a Chinese firm in 2019, with funding lined up from the Asian Development Bank (ADB). The project is to build wind turbines on three small islands in the Palk Strait between southern India.

As the bay is barely 50 kilometres off the coast of Tamil Nadu Indians protested about Chinese activity so close to India, work never began and the project on the islets of Nainativu, Analaitivu and Delft was later scrapped. India has been suspicious of China's growing political and economic influence on the South Asian nation and it is strategically located at the southern tip of the vast Indian sub-continent. 

A joint statement issued Tuesday after a visit to Colombo by India's foreign minister S Jaishankar said a memorandum of understanding (MoU) had been signed to build the installations.

According to the AFP, Sri Lankan officials said India had agreed to provide funding in place of the ADB.

A week before, the Chinese ambassador in Sri Lanka, Qi Zhenhong, expressed Beijing's displeasure over this hurried decision for unknown reasons and said that it will send a wrong message to potential investors. Since India agreed to take on the project as a grant and not a loan Sri Lanka kept the project in suspension dodging China. 

China and India have been competing for major infrastructure projects in Sri Lanka, which is currently facing its worst economic crisis since independence from Britain in 1948.

Colombo has asked for more loans from both nations to shore up its foreign reserves and import essentials including food, fuel and pharmaceuticals. India has indicated it would meet the request for the new line, to be used for importing essential items such as rice, wheat flour, pulses, sugar and medicines, said one of the sources briefed on the matter.

The source said, “Sri Lanka has requested an additional $1 billion credit line from India for imports of essentials,” while adding that “This will be on top of the $1 billion credit line already pledged by India.”

Since 2021, the economic situation in Sri Lanka has been getting worse as the government declared an economic emergency in the country. A sudden spike in food cost and fuel shortage compelled many to queue before grocery stores and petrol pumps.