Sources in NTPC said that the State-run power utility's plan to build a 500 megawatts (mw) plant in Sri Lanka appears to have been been indefinitely delayed, in part because of protests by Tamil Nadu against the Sri Lankan government.

The Sri Lankan embassy in India, however, blamed technical issues, without elaborating. The original plan was to start generating power from the plant in 2011.

The $500 million power project to be set up as an equal joint venture between NTPC and Sri Lanka’s Ceylon Electricity Board (CEB) is an integral part of India’s attempt to engage Sri Lanka politically and economically at a time when China is becoming increasingly influential in that country.

The plant was to be set up on a build, operate, own and transfer basis and with a debt-to-equity ratio of 70:30. It is NTPC’s first overseas project. Anti-Sri Lanka sentiment has been running high in Tamil Nadu, a long-time critic of the government in the neighbouring country over the island nation’s treatment of its Tamil minority.

This has been exacerbated by the capture of Tamil Nadu fishermen by the Sri Lankan navy for allegedly having strayed across the maritime boundary.