India and the United Arab Emirates agreed to develop an energy center in Sri Lanka, the Ministry of External Affairs said on Saturday, as the New Delhi competition of New Delhi with China grows in the Indian Ocean Island nation. The three countries signed the agreement for the hub during Prime Minister Narendra Modi’s visit to Sri Lanka, which was taken over by a global leader in September since Sri Lankan President Anura Kumara Dsnayake.
New Delhi and Colombo have worked to deepen relations as India’s southern neighbor started a serious financial crisis in 2022, during which India provided $ 4 billion in financial aid.
The Saturday’s agreement promotes the competition of New Delhi with China, whose state energy firm Cinopec has signed a deal to create a $ 3.2 billion oil refinery in Sri Lanka’s southern port city of Hambantota.
A natural port in the east of Sri Lanka, the strategically important city of Trincomalee, will include the construction of a multi-product pipeline in the strategically important city and may include using a world war two tank farm organized partially by the Sri Lankan subsidiary of Indian Oil Corp, Foreign Secretary Vikram Misri told reporters in Colombo.
“The UAE is a strategic partner for India in the energy location and therefore was an ideal partner for this exercise that is being done for the first time in the field,” said Mr. Misri. “The exact figure of the role of the UAE will be expanded once after a kick-off of business-to-business discussions.”
The three nations will select commercial institutions next time who consider the financing and viability of projects for the hub, he said.
PM Modi inaugurated the $ 100 million solar power project, a joint venture between Ceylon Electricity Board and the National Thermal Power Corp of India.
India and Sri Lanka also concluded their debt reorganization process, said Foreign Secretary Misri. According to data from Sri Lanka’s Finance Ministry, Sri Lanka’s debt is owned by about $ 1.36 billion in the loan of Bank of India and State Bank of India.
After defaulting its debt in May 2022, Colombo shut down the debt reorganization negotiations, signed an early deal with bilateral creditors Japan, India and China in the last June.
India and Sri Lanka also signed the agreement on power grid connectivity, digitization, security and healthcare.
