India to build power plants in Sri Lanka after fending off China
- The agreement to set up hybrid power projects on northern Sri Lankan islands was signed in the presence of foreign ministers from both sides
- Analysts say the deal is ‘kind of substantial victory for New Delhi ’ in its competition with Beijing for influence in the Indian Ocean
In December, China announced its own project to build power plants on three Sri Lankan islands was suspended due to security concerns involving a “third party.”
An Indian official said on Tuesday he couldn’t confirm if the plants in the new agreement are to be built on the same islands earmarked for the Chinese project. The power source and other details on the projects weren’t available.
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New Delhi considers Colombo, just across the narrow Palk Strait off India’s southeastern coast, to be in it sphere of influence, while the island nation in the middle of a key sea route connecting the east and west, also is important to China’s ambitious belt and road global infrastructure initiative.
“It is kind of substantial victory for India,” said Lynn Ockersz a senior journalist and foreign relations analyst in Sri Lanka.
“Overall it will be in a great position to influence Sri Lanka when it comes to policy issues affecting India,” he said.
Had the Chinese power plant project been realised, it would have placed Beijing next to India’s southern coast. The two countries already have running border disputes in other regions.
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Jaishankar is also taking part in the BIMSTEC summit, a meeting of Bay of Bengal nations Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand for economic cooperation.
The other agreements India signed include providing a maritime rescue coordination centre and building fisheries harbours in Sri Lanka.
Sri Lanka has approached both India and China for help. India provided a US$1 billion credit line to buy essentials following a previous US$500 billion to buy fuel. China is considering a request for a US$2.5 billion economic assistance from Sri Lanka.
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Infrastructure projects that were built on Chinese loans but don’t make money are blamed for its debt crisis. Sri Lanka’s foreign reserves are dwindling but it has to repay US$7 billion in foreign debts this year.
China has been non-committal to a request for debt restructuring.
Beijing has invested billions of dollars in building a seaport, airport, roads and a port city on reclaimed land near Colombo harbour which Sri Lanka’s government aims to develop into a financial city.
Sri Lanka’s government previously scrapped a plan to allow China outright ownership to land on the Colombo Port City and gave 153 acres on a 99-year lease.
