Oman to fund 30% of major refinery project in Sri Lanka

Colombo - 

Sri Lanka announced on Tuesday that an overseas joint venture had committed US$3.85bn to a new oil refinery - the single largest foreign investment in the country’s history.

The Board of Investment of Sri Lanka said the construction would begin this weekend on the refinery and storage facility jointly financed by Oman’s Ministry of Oil and Gas and a Singapore-registered company.

Sri Lanka’s Deputy International Trade Minister Nalin Bandara said he expected the refinery, which will eventually produce 200,000 barrels a day, to be fully operational within four years.

Oman will fund 30 per cent of the new oil refinery project while Singapore-based Silver Park International, which is majority owned by a business interest in India, will finance the rest.

“This is the biggest single foreign investment [in Sri Lanka’s history],” Bandara told reporters in Colombo. It is more than double the next largest foreign investment - a US$1.4bn land reclamation project next to the Colombo port.

The new refinery project will be constructed near the Port of Hambantota, which was leased to a Chinese state-owned enterprise in 2017 for 99 years after Sri Lanka was unable to service a loan from Beijing.

“The latest investment shows that companies in other countries too are interested in going to Hambantota,” Bandara said.

Sri Lanka attracted a record US$2.37bn last year in foreign direct investment, up 38 per cent compared to the previous year, official figures show.

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