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India and SL to ink MOUs on power grid link and Trinco development

India and Sri Lanka are expected to sign MOUs on the Trincomalee development project and much delayed power grid link and Indian assistance for energy and food security as well as currency swap arrangements, during the visit of External Affairs Minister, S. Jaishankar’s visit to Colombo on Thursday 19.

During his stay in the island for two days he will focus on “supporting Sri Lanka” in its current economic crisis, and restructuring Sri Lanka’s debt.

“India is expected to give a positive response to Sri Lanka’s requirements, in keeping with India’s support last year as well,” said a foreign ministry source, citing India’s combined package of about US $4 billion including loans, credit lines for the purchase of essentials and a loan deferment through the Asian Clearing Union.

In addition, talks are expected on two possible MoUs— on the Trincomalee development project and the long-pending plan for a cross-strait transmission line that would allow Sri Lanka access to India’s plans for an energy grid along with other countries like Nepal, Bhutan and Bangladesh.

The sources stressed that while assisting Sri Lanka with its current economic difficulties is a priority, Mr. Jaishankar’s visit, his first with the six-month-old government in Colombo, would see a comprehensive review of bilateral ties.

Meanwhile, diplomatic sources said that the support, in the form of “written financial assurances” from India would be critical for Sri Lanka as it works with its other creditors to resolve the economic crisis.

Announcing the visit by EAM Jaishankar, President Ranil Wickremesinghe said that he had discussed the need for the debt restructuring programme with all Sri Lanka’s creditors, including the 22-nation ‘Paris Club’ of 22 developed nations that hold much of the global debt and discuss solutions to debt crisis together.

He said that Sri Lanka’s “only” option was to seek the support of the International Monetary Fund (IMF) for a nearly three billion dollar bailout, and was also hopeful of a package from the Asian Development Bank (ADB).

He also disclosed the visit by Japanese State Minister of the Cabinet Office Satoshi Fujimaru and the ongoing visit of Chen Zhou, Vice Minister of the International Department, the Communist Party of China Central Committee.

After Mr. Chen’s meeting with President Wickremesinghe, the Chinese Embassy in Sri Lanka said the talks were “friendly and fruitful”, and quoted Mr. Wickremesinghe as saying that he “looked forward to China’s support in restructuring Sri Lanka’s debt at the moment and our economy in the near future”.

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