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Sri Lanka’s Renewable Energy Sector: Strategic Balancing Between India and China Amid Geopolitical Rivalries

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Sri Lanka's Renewable Sector

India and China are actively competing to expand their geopolitical influence in the Indian Ocean Region by investing in Sri Lanka’s renewable energy sector, each driven by distinct strategic motivations. Sri Lanka’s critical position along the world’s busiest maritime trade routes makes it a coveted partner for both powers, transforming its energy landscape into a geopolitical battleground. This paper examines the nature and motivations behind Indian and Chinese investments in Sri Lanka’s renewable energy sector, analysing how these investments reflect broader rivalries over regional hegemony, while also exploring how such foreign capital supports Sri Lanka in achieving energy security and meeting its target of generating 70 per cent of electricity from renewables by 2030.

Following the devastating economic crisis of 2021, Sri Lanka has embarked on structural reforms and renewed investment attraction, with renewables now accounting for approximately 55 per cent of total electricity production. However, bridging the gap to its 2030 targets demands enormous financial and technological support, drawing both India and China deeper into the sector. This paper also critically examines how these competing investments raise concerns over Sri Lanka’s sovereignty, as the risk of debt-trap diplomacy and strategic displacement of rival projects illustrate the delicate balancing act Sri Lanka must perform as it navigates between two contrasting models of engagement.

Click Here to View the Research Paper

Rose Jacob and Sameer Sharif were Research Interns at the Centre for Public Policy Research (CPPR), Kochi, Kerala, India. Dhritishree Bordalai is a Senior Research Associate in International Relations.

Views expressed by the authors are personal and need not reflect or represent the views of the Centre for Public Policy Research.

 

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