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After the abandonment of the Chinese project, India will build 3 wind farms in Sri Lanka

India will set up hybrid power projects in three islands off Jaffna, replacing the Chinese company licensed by Colombo last year.

New Delhi has long been concerned about China’s growing influence in the region.

A $12 million project to build wind turbines on three small islands in the Palk Strait between southern India and Sri Lanka was awarded to a Chinese company in 2019, with funding from the Asian Development Bank ( AfDB).

But after Indian protests against Chinese activity so close to its shores, work never started and the project on the islets of Nainativu, Analaitivu and Delft was later abandoned.

A joint statement released on Tuesday after a visit to Colombo by Indian Foreign Minister S Jaishankar said a memorandum of understanding had been signed to construct the facilities.

An Indian official said he could not confirm whether factories for the new deal were to be built on the same islands earmarked for the Chinese project. Power source and other project details were not available.

India considers Sri Lanka, just across the narrow Palk Strait off India’s southeast coast, to be part of its sphere of influence. The island nation in the middle of a key sea route linking east and west is also important for China’s ambitious ‘Belt and Road’ global infrastructure initiative.

If the Chinese power station project had been realized, it would have placed China next to the southern coast of India. India and China already have ongoing border disputes in other regions.

Jaishankar also attends the BIMSTEC summit, a meeting of the Bay of Bengal nations Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand for economic cooperation.

India has also signed agreements on the provision of a maritime rescue coordination center and the construction of fishing ports in Sri Lanka.

The deals come as Sri Lanka faces its worst economic crisis in recent memory with shortages of medicine, fuel and dairy power and daily power cuts that last for hours.

Sri Lanka has approached India and China for help. India provided a $1 billion line of credit to buy essentials after a previous $500 billion to buy fuel. China is considering an economic aid request of $2.5 billion.

Infrastructure projects that were built using Chinese loans but fail to bring in money are blamed for its debt crisis. Sri Lanka’s foreign exchange reserves are dwindling but it must repay $7 billion in foreign debt this year.

China did not respond 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 the port of Colombo which the Sri Lankan government aims to turn into a city financial.

The government previously scrapped a plan to allow China outright ownership of land in the port city of Colombo and instead gave it 62 hectares (153 acres) on a 99-year lease.

Separately, Sri Lanka has requested an additional $1 billion line of credit from India to import essential goods amid its worst economic crisis in decades, Reuters reported, citing two sources, as the minister India’s Foreign Office was starting talks with its neighbor’s government.

The island nation is struggling to pay for essential food and fuel imports after a 70% drop in foreign exchange reserves since January 2020 led to a devaluation of the currency and efforts to seek help from lenders global.

(with AP inputs)

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Posted: Tuesday, March 29, 2022, 3:48 PM IST