Renewable energy projects and investments in information technology in Sri Lanka and two credit lines for fuel and food were among the areas of economic cooperation that External Affairs Minister S Jaishankar and Sri Lankan Finance Minister Basil Rajapaksa discussed in a virtual meeting on Saturday.
The meeting, which the Ministry of External Affairs described as “detailed”, took place on the heels of significant developments between the two countries. Rajapaksa was to travel to India on January 10 for the Vibrant Gujarat summit 2022, where he was expected to meet top Indian functionaries and potential investors. The summit was postponed on account of the latest
outbreak of Covid-19, and the two sides decided to hold a virtual meeting instead.
Enabling Indian investments in Sri Lanka was one element of a “four pillar” package that Delhi put on the table when Rajapaksa last visited to discuss financial assistance in November 2021. A second ask from Colombo at that meeting was the early finalisation of Trincomalee oil storage joint development project. Though the sides avoided describing it as a quid pro quo, the other elements were two credit lines, one for $500 million for essential commodities, and another for $1 billion for fuel.
A statement from MEA on the meeting said, “both ministers noted that the recent steps taken by the Government of Sri Lanka for jointly modernizing Trincomalee Oil Tank Farms will boost the confidence of investors, apart from enhancing Sri Lanka’s energy security.”
In a tweet Jaishankar “welcomed the progress on Trincomalee Tank Farm which will contribute to energy security.”
The two sides are now close to “dotting the i’s and crossing the t’s” of the credit line for fuel, while the modalities of the credit line for food are still being worked out, The Indian Express has learnt.
Meanwhile, the January 13 USD 900 million package from India – a $ 400 m credit swap facility and the USD 512 deferred ACU settlement – came in the nick of time for Colombo, which is staring at a $ 500 m overseas bond servicing deadline on January 18.
The MEA statement said Rajapaksa welcomed Indian investments in Sri Lanka in a number of important spheres including ports, infrastructure, energy, renewable energy, power and manufacturing and assured that a conducive environment will be provided to encourage such investments.
Top of the list are investments in wind and solar energy farms in the North and East of Sri Lanka, and in the IT sector. In 2020, HCL Technologies opened in Sri Lanka and employs a local workforce of about 1,000 people. The two sides discussed more such investments at their meeting on Saturday.
(www. indianexpress.com)