A diplomatic win? India signs MoUs with Sri Lanka that replaces Chinese power projects

Colombo, Mar 30: On Monday, External Affairs Minister Dr. S Jaishankar and his Sri Lankan counterpart GL Peiris signed the Memorandums of Understanding (MoUs) in this regard during the visit of the EAM to the island nation.

 

 

 

This development can viewed as a diplomatic as well as a strategic win for India as these hybrid power projects on three islands off Jaffna effectively replace the Chinese projects that were okayed by Colombo in 2021.

 

 

In January 2021, a Chinese firm called Sinosar-Etechwin was given the contract to install a hybrid renewable energy system in Nainativu, Delft or Neduntheevu and Analaitivu off the coast of Jaffna, but was reconsidered following objections raised by India. The three islets are located close to Tamil Nadu.

 

India raised questions that New Delhi was concerned about this Chinese project located just within 50 km off the coast of Tamil Nadu and offered to execute the project with a grant. Soon after this, China suspended the project to install hybrid energy plants, citing "security concern" from a "third party", amid reports of India raising concern over its location.

 

 

It is pertinent to mention that China is one of the biggest investors in various infrastructure projects in Sri Lanka under Beijing's controversial Belt and Road Initiative (BRI). However, there has been criticism, both locally and internationally, and growing concerns that China has lured Sri Lanka into a debt trap. The island nation in 2017 has already handed over the strategically important Hambantota Port to a state-run Chinese firm for a 99-year lease as a debt swap amounting to $1.2 billion.

 

India and Sri Lanka have also signed the agreement to set up a Maritime Rescue Coordination Center (MRCC) with the involvement of the defence sector PSU Bharat Electronics Limited. The cooperation in the defence sector may be viewed against the backdrop of increasing Chinese presence in the Indian Ocean Region (IOR).

 

 

The agreements come amid Sri Lanka's worst economic crisis in recent memory with shortages of medicine, fuel, and milk power and daily power outages lasting for hours. It recently announced to extend a USD 1 billion line of credit to Sri Lanka as part of its financial assistance to the country to deal with the economic crisis following a previous $500 billion line of credit in February to help it purchase petroleum products.

 

During the ongoing visit, Jaishankar assured India’s continued support in Sri Lanka’s economic recovery process. Jaishankar reiterated that India’s partnership with Sri Lanka was rooted in the ‘Neighbourhood First’ approach and S.A.G.A.R (Security And Growth for All in the Region) doctrine and that India has stood by Sri Lanka in the hour of its need.