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India UAE and Sri Lanka Sign Trilateral Deal for Energy Hub
Strategic Partnership Announced During Modi’s Visit
India, the United Arab Emirates, and Sri Lanka have agreed to jointly develop an energy hub in the eastern Sri Lankan city of Trincomalee. The announcement was made during Indian Prime Minister Narendra Modi’s visit to Colombo, marking the first visit by a foreign leader since Sri Lankan President Anura Kumara Dissanayake took office in September.
Focus on Trincomalee’s Natural Harbour
The proposed energy hub will be established in Trincomalee, a city with a deep natural harbour considered strategically significant. The project includes plans to build a multi-product pipeline and may incorporate a World War II-era oil tank farm, partially managed by the Sri Lankan subsidiary of Indian Oil Corporation.
UAE Joins as Energy Sector Partner
India’s Foreign Secretary Vikram Misri emphasized the importance of the UAE’s role in the project, noting the country’s existing energy partnership with India. The full extent of the UAE’s involvement will be determined through business-level discussions, with the next steps involving the selection of companies to assess financing and project feasibility.
Counterbalance to Chinese Investments
This trilateral agreement comes amid increasing Chinese investments in Sri Lanka, most notably Sinopec’s $3.2 billion oil refinery deal in the southern port city of Hambantota. The new energy hub is expected to strengthen India’s strategic presence in the region.
Broader Energy and Infrastructure Cooperation
Solar Power Project Launched
During the visit, Prime Minister Modi also inaugurated a $100 million solar power project. The initiative is a joint venture between Sri Lanka’s Ceylon Electricity Board and India’s National Thermal Power Corporation.
Agreements on Connectivity and Healthcare
India and Sri Lanka signed several other agreements aimed at deepening bilateral cooperation. These include pacts on power grid connectivity, digital infrastructure, security collaboration, and healthcare development.
Debt Restructuring Finalized
Economic Recovery Support
India and Sri Lanka have concluded a debt restructuring agreement, a key step in Sri Lanka’s recovery from its 2022 financial crisis. India had previously extended $4 billion in financial assistance during the crisis.
Outstanding Loans
Sri Lanka currently owes approximately $1.36 billion to India’s EXIM Bank and State Bank of India. The agreement follows earlier restructuring talks involving bilateral creditors, including Japan and China.
“India UAE and Sri Lanka Sign Trilateral Deal for Energy Hub” “India UAE and Sri Lanka Sign Trilateral Deal for Energy Hub” “India UAE and Sri Lanka Sign Trilateral Deal for Energy Hub”