Colombo: India and the United Arab Emirates (UAE) have joined hands with Sri Lanka to develop a strategic energy hub in Trincomalee, signaling a major geopolitical and economic initiative in the Indian Ocean region.
The trilateral agreement, announced during Indian Prime Minister Narendra Modi’s visit to Sri Lanka, marks the first such visit by a global leader since President Anura Kumara Dissanayake took office in September.
The proposed energy hub in Trincomalee, a natural harbor on Sri Lanka’s eastern coast will include a multi-product pipeline and could involve the use of a World War II-era oil tank farm, partially operated by the Sri Lankan subsidiary of Indian Oil Corporation (IOC).
The move comes amid intensifying competition between India and China in Sri Lanka. Beijing has already made inroads, with Chinese energy giant Sinopec set to build a $3.2 billion oil refinery in Hambantota, in the country’s south.
The India-UAE-Sri Lanka partnership represents New Delhi’s strategic pushback, aimed at reinforcing regional cooperation and counterbalancing Chinese infrastructure investments.
Prime Minister Modi also inaugurated a $100 million solar power project, a joint venture between India’s National Thermal Power Corporation (NTPC) and the Ceylon Electricity Board.
The visit also marked the conclusion of Sri Lanka’s debt restructuring with India, covering approximately $1.36 billion in loans from EXIM Bank of India and State Bank of India.
Beyond energy, India and Sri Lanka signed several agreements covering digital transformation, power grid connectivity, security collaboration, and healthcare.
