India extends $100-mn Line of Credit to Sri Lanka to finance solar projects

The agreement was exchanged between High Commissioner of India to Sri Lanka Gopal Baglay and the Sri Lankan secretary to the treasury S.R. Attygalle in the presence of president Gotabaya Rajapaksa.

In a statement, the Indian high commission in Colombo said the LOC will help finance various projects in the solar energy sector in Sri Lanka including those announced during the founding conference of the International Solar Alliance (ISA) held in March 2018, such as rooftop solar photovoltaic systems for households and government buildings.

President Rajapaksa and high commissioner Baglay discussed the similarity in the national objectives outlined by Sri Lanka and India in connection with solar energy. Over the past seven years, solar power generation in India has increased to 34.6 GW in 2021 from about 2.6 GW in March 2014. The National Solar Mission of India aims to increase it further to 100 GW and beyond.

“The shared vision of our countries in the renewable energy sector reflects our common national priorities and convergence of approaches for sustainable development. Strengthening collaboration in this vital sector will help enhance our overall energy partnership and contribute to our global efforts to tackle climate change and reduce emissions,” the statement said.

89 countries including Sri Lanka have signed the framework agreement of ISA which was jointly launched by Prime Minister Narendra Modi and former French president Francois Hollande in November 2015 to bring together countries to promote large-scale deployment of solar energy and overcome challenges related to technology, finance and capacity.

Exim Bank has so far extended nine LOC to Sri Lanka including the latest one taking the total value to $1.68 billion. Projects covered under the LOCs in Sri Lanka include the supply of petroleum products, railway projects, defence and infrastructure projects. It has so far extended 272 LOCs covering 62 countries in Africa, Asia, Latin America and the Commonwealth of Independent States (CIS) countries with credit commitments of around $26.84 billion available for financing exports from India.