Sri lanka and India are to sign an MoU to study the feasibility of laying an undersea cable to connect the power networks of two countries.

Interlink between India and Sri Lanka will firm up the idea of establishing a South Asian energy grid being discussed by SAARC.

It will allow both countries to manage peak demand or at times when hydrel capacities in their respective areas run low just as it is doing now in India, official sources said.

It will also help Sri Lanka reduce use of expensive fuels and import cheaper power from India's surplus. The power supply scenario will allow the two countries to exchange about 500 mw of electricity in the short term.

The undersea link will be laid on the seabed just as telecom and Internet cables run across ocean beds around the world.

The project will be looking at laying a cable in the Gulf of Mannar between Rameshwaram in Tamil Nadu and Talaimannar on the left flank of the Mannar islands in Sri Lanka. The underwater cable will be linked to Sri Lanka’s network at Anuradhapura through an overhead line.

The Times of India reported, that an initial report prepared by the state-owned transmission utility PowerGrid, which will be the implementing agency from India for the sub-sea link, has pegged the cost at Rs 2,292 crore and said it could be completed within 42 months of getting investment approvals.