Indian prime minister Narendra Modi hopes to improve relations with Sri Lanka by launching a joint-venture solar project near the city of Trincomalee, in the northeast of the island, the Tamil Guardian reports.

The virtual groundbreaking ceremony will be carried out on Saturday, during Prime Minister Modi’s official visit to Sri Lanka.

Modi and Sri Lankan President Anura Kumara Dissanayake will witness the inauguration of the 120MW venture over video link from Colombo.

The project is as important for political as for practical reasons. Vikram Misri, the secretary of India’s foreign ministry, said the decision to work together with Colombo on the scheme was “a milestone in the bilateral partnership”.

He said: “They will together dedicate several projects that are being built with Indian assistance in Sri Lanka and will also witness the exchange of several memorandums of understanding pertaining to energy connectivity, digitisation, defence, health, and multisectoral grant assistance.”

The solar farm, located in the town of Sampur, is a collaboration between India’s National Thermal Power Corporation and Sri Lanka’s Ceylon Electricity Board. It has been under discussion since 2012, although at that time it was intended to be a 500MW coal plant.

The move is being seen as part of India’s long-running competition with China for influence in Sri Lankan politics.

China has made the island one of the main nodes in the maritime element of its Belt and Road Initiative, and has been a major investor in the island’s infrastructure and ports.

The Sri Lankan president travelled to Beijing in January, continuing his government’s policy of maintaining good relations with both of the regional rivals.