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Victoria Dam Resurrected: China's Influence Rises in Sri Lanka

  //food-wine.news-articles.net/content/2026/02/18 .. rected-china-s-influence-rises-in-sri-lanka.html
  Published in Food and Wine on Wednesday, February 18th 2026 at 18:06 GMT by The Independent
      Locales: Hong Kong, Guangdong, CHINA

Colombo, Sri Lanka - February 18th, 2026 - A contentious hydroelectric dam project, the Victoria Dam, has been resurrected in Sri Lanka with renewed Chinese investment, reigniting anxieties about Beijing's escalating influence and potential debt-trap diplomacy in the strategically important island nation. The project, initially stalled due to significant environmental and social concerns, represents a microcosm of a broader pattern of Chinese engagement across Sri Lanka, raising questions about the nation's sovereignty and long-term economic stability.

The Victoria Dam project, part of China's ambitious Belt and Road Initiative (BRI), involves the construction of a 100-megawatt hydroelectric power plant nestled within Sri Lanka's central hills. Backed by a $347 million loan from the Export-Import Bank of China, the project aims to bolster Sri Lanka's electricity supply. However, critics are painting a far less optimistic picture, viewing it as a potent symbol of China's "silent invasion" - a gradual assertion of economic and political control under the guise of infrastructure development.

"This isn't simply about a dam; it's about control," explains Jagath Bandara, a long-time local activist who has tirelessly opposed the project. "The initial environmental impact assessments were deeply flawed, and genuine consultation with the communities directly affected was virtually non-existent. They promise development, but the real cost is being borne by the people and the environment."

The roots of the Victoria Dam controversy extend back to 2011, when it was first proposed. Local communities have consistently voiced fears of widespread displacement, the inundation of fertile farmland, and irreversible damage to the fragile ecosystem. While the Sri Lankan government insists it is committed to environmental safeguards and transparency, skepticism remains high. A spokesperson for the Environmental Conservation Organization stated, "We are gravely concerned that this project is being fast-tracked without sufficient oversight. The long-term well-being of Sri Lanka must be prioritized, and that doesn't appear to be happening."

This is not an isolated incident. The Victoria Dam project echoes the increasingly familiar narrative surrounding Chinese infrastructure projects in Sri Lanka, most notably the 2017 handover of the Hambantota port to China Merchants Port Holdings. Unable to service the debt incurred to construct the port, Sri Lanka ceded control of a critical strategic asset for a 99-year lease. This event served as a stark warning about the potential consequences of relying heavily on Chinese financing.

China has steadily become Sri Lanka's largest trading partner and creditor, wielding significant influence over the nation's economy and political landscape. While proponents highlight the benefits of Chinese investment in infrastructure, critics argue that these benefits are often outweighed by the accruing debt and the erosion of Sri Lanka's decision-making autonomy. The pattern is clear: large-scale loans are extended for infrastructure projects, and when Sri Lanka struggles to repay, China gains leverage, often resulting in asset control or undue political influence.

The Victoria Dam project is particularly complex due to the extensive land acquisition required. Rural farmers and villagers, many of whom maintain traditional lifestyles, face the prospect of losing their homes and livelihoods. The process of resettlement, even if adequately funded (which is a major concern), rarely fully compensates for the loss of ancestral lands and established community bonds. The potential for social unrest and long-term economic hardship within the affected communities is significant.

Furthermore, the project's financial viability is increasingly uncertain given the current global economic climate. Rising interest rates could drastically increase the cost of the Chinese loan, potentially pushing Sri Lanka further into debt. This vulnerability highlights the inherent risks of relying on foreign financing for large-scale infrastructure projects, especially when the lender holds significant leverage.

Looking ahead, the situation demands careful scrutiny. Sri Lanka must prioritize sustainable development strategies that benefit its citizens without compromising its sovereignty or financial stability. Increased transparency in loan agreements, robust environmental impact assessments, and genuine community consultation are crucial. The international community also has a role to play in advocating for responsible lending practices and supporting Sri Lanka in diversifying its economic partnerships. The Victoria Dam is more than just a power plant; it's a bellwether for Sri Lanka's future.