As the country attempts to capitalize on its strategic location to solidify its recovery from a financial crisis, Sri Lanka's energy minister announced that plans to establish an energy hub with India and the United Arab Emirates (UAE) will begin next month.

Prime Minister Narendra Modi, the first world leader to visit the island since President Anura Kumara Dissanayake took office last September, signed an agreement with the three to establish the hub during his visit this month.

Following the greatest financial crisis in decades three years ago, which caused uncontrollable inflation, drove the local rupee down, and forced the nation to default on $25 billion in debt, Dissanayake won an election on promises of stability.

A multi-product pipeline, bunkering facilities, and maybe a refinery will be built as part of the hub in Trincomalee, a city with an eastern harbor.

Additionally, it will involve the construction of a storage tank farm from World War II that is partially controlled by Indian Oil's Sri Lankan affiliate.

According to Udayanga Hemapala, secretary of the energy ministry, representatives from state-owned Ceylon Petroleum, Indian Oil, and AD Ports will gather in Sri Lanka in late May to begin working on a comprehensive business strategy for the center.

 

According to the president's office, President Dissanayake also spoke with Sheikh Abdullah Bin Zayed Al Nahyan, the foreign affairs minister and deputy prime minister of the United Arab Emirates, about energy cooperation in Colombo this week.

Sinopec, a Chinese state energy company, has agreed to construct a $3.2 billion oil refinery in Hambantota, a port city in southern Sri Lanka.

Previously, as New Delhi's rivalry with China intensified in the Indian Ocean island nation, India's foreign ministry announced on Saturday that the country and the United Arab Emirates had agreed to establish an energy hub in Sri Lanka.

During Indian Prime Minister Narendra Modi's first visit to Sri Lanka since Anura Kumara Dissanayake became president in September, the three countries signed the agreement for the hub.

Also Read: Inspirational Quotes from 5 Indian Business Legends

As India's southern neighbor recovers from a catastrophic financial crisis that was precipitated in 2022 and during which India contributed $4 billion in financial help, New Delhi and Colombo have moved to strengthen their relationship.