Sri Lanka scraps energy deal with China, signs fresh contract with Bengaluru company

The project was initially funded by an Asian Development Bank (ADB) loan; however, it is now backed by an $11 million Indian government grant. The contract with the Chinese company was temporarily scrapped two years ago the after Indian government raised concerns.

India has over the past few years grown skeptical of growing Chinese involvement in its neighbour states, a trend it has sought to counter with its own initiatives.

Indian company U-Solar, based out of Bengaluru, will now be taking over the contract. India’s assistance “underscored the significance New Delhi attached to bilateral energy partnership”, the Indian embassy said in a statement.

The three facilities will have a combined 2,230 kilowatts of renewable energy capacity and be located on islets near the northern city of Jaffna, not far from India’s southern coast.

“The hybrid project combines various forms of energy including both solar and wind, towards optimising capacities,” a press release from the Indian High Commission in Colombo said.