Indian outrage at Sri Lanka as China establishes power projects in the North

by Viruben
Feb 7, 2021

Following Sri Lanka’s withdrawal from the ECT agreement, India is reported to have lodged a strong complaint against Sri Lanka for enabling a Chinese company to establish three renewable energy projects in outlying islands off the Jaffna peninsula.

The ECT was worth an estimated $500-$700 million and May 2019 Sri Lanka had agreed with India and Japan to a development project which would see Sri Lanka to retain a 51% stake whilst the Adani Group, an Indian business with ties to Indian Prime Minister Narendra Modi would hold 49%.

These projects are worth an estimated US $12 million and have been granted to MS/Sinosar-Etechwin Joint Venture in China. India diplomats have noted that such projects, on the Delft Island, Analativu and Nainativu, would raise serious security concerns.

 

Responding to the ECT

Responding to Sri Lanka’s sudden withdrawal from the ECT, following harsh Sinhala nationalist backlash, one Indian diplomat said:

“India is at a loss to understand Sri Lanka’s action which is highly damaging. It feels Sri Lanka lost a good opportunity. India has maintained close trade, cultural and security relations. It has not been told a word about the ECT deal being cancelled before the Cabinet took a decision. This would naturally have a rupturing effect on bilateral relations.”

Another high-ranking official from the Bharatiya Janatha Party (BJP) stated:

“It appears to us that it is a hoax from the beginning. Sri Lanka was not going to give it to us.”

The Indian government has further demanded that Sri Lanka settle a currency swap agreement worth US$ 400 million as opposed to enabling a further extension. Despite Sri Lanka’s ongoing foreign exchange crisis, the Central Bank of Sri Lanka was able to raise the money however the Rajapaksa administration has said it will not seek to obtain an IMF bailout but have instead looked towards China for further loans.

Indian officials have further raised concerns over the deaths of 4 Tamil Nadu fishermen found in Sri Lanka. India’s Foreign Minister, Subrahmanyam Jaishankar, described the deaths of these fishermen as “unacceptable” and maintained that India government has raised concerns with their Sri Lankan counterparts.

According to the Sunday Times, Sri Lankan diplomats are concerned over the ramifications of the ECT given the upcoming UN Human Rights Council session in March. Both India and Japan are members of the 47-member Council.

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