Sri Lanka announced its preference for India over China in the allocation of tenders for power projects near Jaffna. This decision came shortly after President Ranil Wickremesinghe's trip to New Delhi. The Ceylon Electricity Board (CEB) recently initiated the process of inviting tenders for hybrid power projects in three northern islands of Sri Lanka. These projects would be funded by a $12 million grant from India. In January 2021, a contract was awarded to the Chinese company Sinosar-Etechwin by Sri Lanka to establish a hybrid renewable energy system in Nainativu, Delft or Neduntheevu, and Analaitivu islands off the coast of Jaffna. However, this contract was later cancelled. The recent tender for projects funded by Indian grants was only released recently. New Delhi had communicated its concerns to Colombo regarding Chinese initiatives in close proximity to southern India. Various Chinese activities in Sri Lanka, which had implications for India's strategic interests, had been the subject of regular discussions between Colombo and New Delhi. This included matters such as the visit of a spy ship from China the previous year. Sri Lanka's decision to exclude China from the project resulted in tensions between the two countries. During 2021-22, the Chinese embassy in Colombo expressed its reservations to the government of Gotabaya Rajapaksa at that time. The decision to revoke the tender awarded to the Chinese company was taken by the then-power minister, Dullas Alahapperuma. The Chinese embassy also posted a tweet indicating that the suspension of the project was due to security concerns raised by a third party. India's involvement in Sri Lanka's energy sector revolves around the objective of establishing interconnectivity between the two national power grids. The Adani Group obtained approval to initiate two wind power plants in Mannar and Pooneryn, aimed at generating around 350 MW of electricity. During President Wickremesinghe's visit to India in July, both countries agreed to establish a high-capacity power grid interconnection. This interconnection would facilitate bidirectional electricity trade between Sri Lanka and neighboring countries like Bangladesh, Bhutan, India, and Nepal (BBIN countries). Such a grid connection holds the potential not only to reduce the cost of electricity in Sri Lanka but also to create a dependable source of foreign exchange for the country. Also read:  Oil India upgrades to Maharatna, ONGC Videsh to Navratna Essar Oil & Gas to Strengthen Ranigunj CBM Position