Amid India's protest, China suspends projects in Sri Lanka due to 'concern by third party'

Amid the strong protest lodged by India, China on Friday suspended a project to set up hybrid energy plants in three islands of Sri Lanka. Issuing a statement, the Chinese Embassy in Sri Lanka announced that Sino Soar Hybrid Technology's project to build a Hybrid Energy system in three northern islands of the country was being suspended due to 'security concern from a third party'. The Chinese firm had been awarded the contract to come up with a hybrid renewable energy system in Nagadeepa, Delft, and Analthivu islands in January 2021. The three Lankan islands, located off the coast of Jaffna are strategically close to Tamil Nadu. 

Why India lodged a protest

According to a report by Sri Lanka's News First, India had lodged a "strong protest" with Sri Lanka on the award of the tender to the Chinese company. The contract was part of the Supporting Electricity Supply Reliability Improvement Project, which is implemented by the Ceylon Electricity Board (CEB) and funded by the Asian Development Bank (ADB). 

Given its location and India’s maritime security sensitivities, India had taken up the matter with the Rajapaksas and had offered to build the same systems, at a fraction of the cost. To solidify the resolution, India also detailed how China's project would fall under environmental scrutiny and offered to make it more environmentally friendly. With a formal proposal and a grant of money in the pipeline, Sri Lanka cancelled its agreement with China and had agreed to give the project to India. The decision was reportedly consolidated after Finance Minister Basil Rajapaksa visited New Delhi last week.

China moves project to Maldives

Meanwhile, China has now moved the project to the Maldives after inking an agreement with the Ministry of Environment, Climate Change and Technology. The agreement will let Sino Soar Hybrid Technology build design, supply, installation and maintenance of grid-tied solar PV-diesel hybrid power generation plants in all 12 inhabited islands of Thaa Atoll. A formal contract for the same was signed on November 29 by Environment Minister Aminath Shauna and the Project Manager of Sino Soar Hybrid Technology Kao Xiaoming. "The project is expected to avoid 2,900 tons of carbon dioxide emission annually," Maldives' state-run broadcaster PSM News reported. 

(With Agency Inputs)