BEIJING: Sri Lanka has secured its biggest-ever foreign investment after signing a deal with Chinese state-run oil giant Sinopec, officials said on Thursday (Jan 16).
Sinopec has agreed to invest US$3.7 billion to construct a “state-of-the-art oil refinery” with a capacity of 200,000 barrels in the southern Hambantota region, according to the Sri Lanka president’s media division.
“During President Anura Kumara Dissanayake’s four-day state visit to China, Sri Lanka marked a significant milestone by securing the largest foreign direct investment to date,” it said.
A “substantial portion” of the refinery’s output would be earmarked for export as part of efforts to shore up Sri Lanka’s foreign exchange earnings, a statement said.
“This major investment from China is expected to bolster Sri Lanka’s economic growth while uplifting the livelihoods of low-income communities in the Hambantota area,” it added.
The port of Hambantota was handed to a Beijing company on a 99-year lease for US$1.12 billion in 2017 after Sri Lanka was unable to repay a huge Chinese loan, a controversial decision which raised questions about Chinese investments in the country.
Sri Lanka also defaulted on its foreign borrowings in 2022 during a crisis that caused months of food, fuel and medicine shortages.
