Colombo, July 25:

Sri Lanka has approved a proposal for a mega underwater power transmission deal with India to meet a major part of the soaring power needs.

Power and Energy Minister WDJ Seneviratne today said the $450 million deal will help export power through a 200-km submarine cable from Madurai power grid in Tamil Nadu via Palk Strait — the strip of sea that separates the two countries — to Thalaimannar, Mannar and Anuradhapura national power grid.

“This is a project acceptable to governments of both countries as it is a two-way traffic. We are hoping to sign the memorandum of understanding (MoU),” Seneviratne said. “This project is expected to bring maximum economic benefits to both countries through the exchange of 1,000 MW of power,” he said, adding that the cabinet approved his proposal on Wednesday. Asked if the MoU might be signed on the sidelines of the coming South Asian Association for Regional Cooperation (SAARC) summit, he said: “It cannot be ruled out.”

According to preliminary studies, Seneviratne said the construction work would take 40 months to finish. The cabinet has also granted approval to a memorandum submitted by the minister for the implementation of a rural electrification project with assistance from Iran.