Crisis-hit Sri Lanka and India revive talks to link electric grids between the two nations

India and Sri Lanka have resumed talks on linking their electricity grids, according to a Reuters report, adding that this step could aid New Delhi’s goal of reducing China’s influence on the island nation, now grappling with a severe economic crisis.

There was no immediate prospect that power cuts brought by the crisis could be eased by the talks, which are a preliminary effort on a multi-year project both sides have explored before.

India has extended assistance running into billions of dollars to its southern neighbour to fight the crisis, brought on by a steep drop in foreign exchange reserves that stalled imports of essentials such as fuel, so disrupting power supply.

Protests and political turmoil brought on by rocketing inflation, a currency devaluation and shortages have spurred the nation of 22 million to begin talks with the International Monetary Fund (IMF) for a loan programme, also backed by India.

Now officials of both countries are turning to a project that has made little progress since it was first proposed more than a decade ago, aiming to link the neighbours with miles-long transmission line running under the Indian Ocean. The grid connection project came up in talks with India’s power ministry in March, when Basil Rajapaksa, then Sri Lanka’s finance minister, visited New Delhi to seek assistance, said a source with knowledge of the matter.

The project figured among the key objectives of a strategy paper issued by Sri Lanka’s diplomatic mission in India last July. ”This would enable Sri Lanka to obtain electricity during operational maintenance and droughts, and also to export excess generation to India,” it said in the document.

Nearly two-thirds of Sri Lanka’s electricity is generated by oil and coal-fired plants, while hydro makes up the rest. Its total daily power demand is just a fraction of India’s, and meeting peak demand can be a challenge during times of drought. Beijing and New Delhi have long vied for influence over the island, strategically located just off India’s southern tip, and Indian assistance in recent weeks has swelled amid a worsening crisis that has brought thousands on the streets.

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