COLOMBO – Sri Lanka has signed its largest-ever foreign investment deal, a US$3.7 billion agreement with Chinese state-run oil company Sinopec, to construct a cutting-edge oil refinery in the Hambantota region. The refinery, with a capacity of 200,000 barrels per day, is expected to bolster Sri Lanka’s economic growth and foreign exchange earnings, with a significant portion of its output earmarked for export.
The agreement was finalized during Sri Lankan President Anura Kumara Dissanayake’s four-day state visit to China. Chinese President Xi Jinping described the partnership as a “historical opportunity” to deepen bilateral ties and build a “shared future” between the two nations.
Hambantota, a strategic maritime hub, previously drew attention after its port was leased to a Chinese firm in 2017 due to Sri Lanka’s inability to repay a substantial loan. This latest investment underscores China’s growing influence in the region and its role in Sri Lanka’s economic recovery following the 2022 financial crisis.
The refinery project replaces a stalled 2019 agreement with an Indian-Singaporean company and is expected to uplift local livelihoods and provide significant economic benefits, solidifying Sinopec’s strategic presence in the Indian Ocean.