Infrastructure, energy and debt on agenda as Sri Lanka president arrives in India

Sri Lankan President Ranil Wickremesinghe arrives in New Delhi on Thursday on a two-day visit hoping to strengthen economic ties between the South Asian countries.

Strategically important energy, power and port projects will be discussed during his meeting with Indian Prime Minister Narendra Modi on Friday, officials from both countries said.

In his first trip to India since he took over as the president a year ago after his predecessor was forced to quit following widespread protests, Wickremesinghe also will update New Delhi on progress made to stabilize the island’s crisis-hit economy.

India’s support was critical for Sri Lanka last year after it almost ran out of dollars and sank into a financial crisis that left it struggling to fund essential imports including fuel and medicine.

India provided about $4 billion in rapid assistance between January and July 2022, including credit lines, a currency-swap arrangement and deferred import payments, and sent a warship carrying essential drugs for the island’s 22 million people.

While New Delhi has traditionally had strong ties with its southern neighbour, the small island nation has become a jousting ground between India and China due to its strategic location in the Indian Ocean.

An Indian official, speaking anonymously because he is not authorised to speak to journalists, said an agreement for development projects in the northeastern coastal city of Trincomalee will be announced during the visit, along with another agreement for renewable energy projects.

In October, Wickremesinghe unveiled a blueprint for Trincomalee including a proposal to work with India to develop a strategic port, a new industrial zone and an energy hub, according to details released by his office.

Additionally, the two nations will produce a joint statement for supporting Sri Lanka’s dairy sector.

Improving connectivity between the two countries will also figure prominently during the bilateral talks, officials on both sides said.

The two sides have had preliminary discussions for an undersea cable which would connect their power grids and a fuel pipeline from southern India’s mainland to northern Sri Lanka – projects that could together cost at least $4 billion, according to officials on both sides.

Colombo will focus on grid connectivity with India, port development and renewable energy projects, largely in the northern part of the island, Foreign Minister Ali Sabry had told reporters.

Progress on debt restructuring will also be discussed, Sri Lanka’s Cabinet spokesman and Transport Minister Bandula Gunawardena said on Tuesday, as India is a key creditor to the island with $1.9 billion in outstanding debt.

Sri Lanka defaulted on its foreign debt last May and India is part of a common platform established with Japan and other Paris Club members to help the island restructure its debt.

In the energy sector, India’s state-run NTPC (NTPC.NS) is working on a 100-megawatt solar power plant in Trincomalee district.

The Sri Lankan government also approved two wind power plants on its northwest coast by India’s Adani Green Energy Ltd (ADNA.NS) in February with a total investment of $442 million.

(Reuters)

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