According to officials, India and Sri Lanka have resumed talks on linking their electricity grids.
India has extended financial support to Sri Lanka to fight the crisis, brought by a steep decline in foreign exchange reserves that stalled imports of essentials like fuel, disrupting the power supply.
A currency devaluation and shortages have prompted the nation of 22 million to begin talks with the International Monetary Fund (IMF) for a loan programme, even backed by India.
The country aims to link the neighbours with a miles-long transmission line running under the Indian Ocean.
The grid connection power project came up in talks with the Indian Ministry of Power when Basil Rajapaksa, then Sri Lanka’s Minister of Finance, visited New Delhi to seek assistance.
It would enable Sri Lanka to obtain electricity during operational maintenance and droughts and export excess generation to India.
About two-thirds of Sri Lanka’s electricity is generated by oil and coal-fired plants, and the rest by the hydro project.
The grid connectivity power project could become part of New Delhi’s requests from Sri Lanka, which has also secured Chinese infrastructure deals in recent times.
To date, India has provided about $1.9 billion through credit lines and swaps and committed up to $2 billion more to help Sri Lanka tackle its worst financial crisis since independence from Britain in 1948.
The project to link the two grids has been in the works for years, with the neighbouring country signing a pact in 2010 on feasibility studies for an undersea power cable.
Power Grid Corporation of India envisaged the deployment of either a 500 MW or a 1,000 MW undersea transmission system.
The shortest distance between India and Sri Lanka is the Palk Strait, which is about 40 km wide, and the length of an undersea cable would depend on its alignment.
The subsea electrical cables, having long spans, include the NordLink, between Germany and Norway, which is 623 km long.