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India's $11M Boost to Sri Lanka's Green Energy

March 9, 2024 | Expert Insights

On March 2nd, India and Sri Lanka embarked on a collaborative effort to bolster Sri Lanka's energy security and promote sustainable development through a new $11 million grant project. This initiative marks the third India-backed renewable energy project in Sri Lanka's north and east, highlighting India's commitment to regional cooperation and environmental stewardship.


The initiative entails the implementation of hybrid renewable energy infrastructure across three islands – Delft, Nainativu, and Analaitivu – situated off the Jaffna peninsula in northern Sri Lanka. These islands have historically encountered difficulties in accessing reliable power from the national grid. The Indian government's provision of an $11 million grant will be utilized to establish a hybrid system, integrating solar and wind power generation with battery storage. This comprehensive approach aims to ensure a consistent and dependable energy supply for the island communities, even during periods of low wind or limited sunshine.

The project carries significant implications for Sri Lanka's energy landscape. Presently, the nation faces mounting energy demands and relies heavily on imported fossil fuels, rendering it susceptible to price fluctuations and disruptions in the supply chain. By harnessing the abundant renewable energy resources available in the region, particularly solar and wind power, this initiative will contribute to Sri Lanka's quest for energy independence and diversification. Moreover, the incorporation of battery storage will mitigate the inherent intermittency of renewable energy sources such as solar and wind, thereby guaranteeing a stable and reliable power supply for the islands.

Furthermore, the project aligns with Sri Lanka's commitment to environmental sustainability. By transitioning away from fossil fuel dependency towards clean and renewable energy sources, Sri Lanka can substantially reduce its carbon footprint and contribute to global endeavours aimed at mitigating climate change. Additionally, the project's emphasis on decentralized power generation minimizes transmission losses associated with conventional grid-based systems, thereby enhancing its environmental merits.

India's involvement in this endeavour extends beyond financial assistance. The participation of a private Indian company, U Solar Clean Energy Solutions Pvt. Ltd., capitalizes on India's expertise in the renewable energy sector. This collaboration facilitates knowledge and technology transfer, thereby bolstering Sri Lanka's long-term capacity building in renewable energy development and management. The project serves as a prominent manifestation of India's "Neighbourhood First" policy, underscoring regional cooperation and development assistance. By addressing a crucial requirement for energy security in Sri Lanka, India strengthens bilateral relations and fosters goodwill within the region.



India's involvement in Sri Lanka's development has a rich history, marked by significant investments and engagement across various sectors. Through numerous projects and initiatives, India has demonstrated a steadfast commitment to fostering economic growth, social development, and cultural exchange in its neighbouring country.

In the realm of infrastructure development, India has played a pivotal role in projects totalling over $4 billion. These endeavours encompass a diverse range of initiatives aimed at enhancing connectivity and driving economic activity. Notable examples include the renovation of the Jaffna International Airport, which facilitates air travel and connectivity within Sri Lanka and beyond. Additionally, the construction of the $400 million Uma Oya Multipurpose Project stands as a testament to India's efforts to address critical needs such as irrigation, drinking water supply, and hydropower generation. Moreover, the development of the Trincomalee Port, backed by a potential investment of $500 million, holds strategic significance for Sri Lanka's east coast, promoting trade and maritime connectivity in the region.

Beyond infrastructure, India has also been instrumental in addressing Sri Lanka's energy needs. Through fuel supply under credit lines exceeding $1.5 billion, India ensures a reliable source of energy for power generation in Sri Lanka. Furthermore, collaborative ventures in the oil and gas exploration sector underscore India's commitment to enhancing Sri Lanka's energy security, thus fostering long-term sustainability and resilience.

India's engagement extends beyond the economic sphere, encompassing social development initiatives valued at over $2 billion. These initiatives encompass a wide spectrum of activities, including the establishment of vocational training centres, the provision of advanced medical equipment to hospitals, and the delivery of critical humanitarian aid in the aftermath of natural disasters. Such endeavours underscore India's deep-rooted commitment to advancing the social well-being and resilience of Sri Lanka's populace.

Cultural exchange forms a cornerstone of India-Sri Lanka relations, underpinned by shared historical and cultural ties. India actively promotes cultural exchange programs, facilitating Buddhist pilgrimage tours for Sri Lankans and offering scholarships to enable Sri Lankan students to pursue higher education in India. These initiatives serve to foster mutual understanding, strengthen people-to-people ties, and nurture a sense of shared heritage and identity between the two nations.

India's multifaceted engagement with Sri Lanka is guided by its "Neighbourhood First" policy, which prioritizes fostering robust relations and enhancing cooperation with neighbouring countries. Through collaborative efforts in areas such as maritime security, counter-terrorism initiatives, and disaster management, India and Sri Lanka contribute to regional stability and resilience, thus underpinning broader efforts towards peace and security in the region.

Trade agreements, investment projects, and infrastructure development initiatives serve as key instruments for promoting regional trade and economic integration, thereby fostering mutual prosperity and development. India's substantial development assistance to Sri Lanka, totalling over $4.5 billion in grants and lines of credit, underscores its enduring commitment to supporting Sri Lanka's economic and social development aspirations.


  • India's investments in Sri Lanka offer substantial advantages for both nations. Sri Lanka gains access to essential resources, expertise, and infrastructure development, while India strengthens its strategic partnership with a key neighbour and expands its economic footprint in the region. The "Neighbourhood First" policy, exemplified by the recent renewable energy project, serves as a framework for a mutually beneficial and sustainable partnership between India and Sri Lanka.
  • This collaborative approach, focused on energy security, infrastructure development, and cultural exchange, paves the way for a more prosperous and secure future for both nations. As India and Sri Lanka continue to build upon this strong foundation, their partnership holds immense potential to serve as a model for regional cooperation and development in South Asia.