Sri Lanka continues to attract foreign investments and the latest inflows will be assigned to finance the country’s massive infrastructure projects. The national government said a freshly approved loan of $989 million from China will be used to build a motorway while a Singaporean firm will spearhead the construction of a $3.9 billion oil refinery.
Together, the investment injections will amount to nearly $5 billion of offshore funding, which according to Colombo will be the largest the nation would receive since the country fired up its accelerated program of luring in foreign investors.
“The Export-Import Bank of China has agreed to provide a loan covering 85 per cent of the contract price for Central Expressway Project – Section 1,” the South China Morning Post reported, adding the loan represents “the single largest loan approved by the bank for Sri Lanka.”
It is understood that the entire road project will require around $1.16 billion to complete. The SCMP indicated on its report that the balance of the project cost will be raised by Sri Lanka.
Biggest Foreign Investment
However, it is the oil refinery that Singapore’s Silver Park International Private Limited will build on Colombo which has been touted by the government as “the biggest foreign investment in the country’s history.”
In partnership with Oman’s Ministry of Oil & Gas, the Singaporean firm is set to pour in $3.9 billion to the refinery project and construction activities will commence at the start of April. The national government has projected that projection completion will be sometime in 2023, also the same year that the facility is targeted to go online.
When the oil refinery becomes operational, Silver Park will enjoy 70 per cent stake of the joint venture while Oman is set to get 30 per cent, Colombo said in a statement.
Raking In Huge Benefits
The oil refinery operating in full capacity is designed to produce 200,000 barrels per day, the bulk of which will be reserved for export. But a sizeable portion will likely be deployed to the local market, indicating that the project will deliver twin benefits to the Sri Lankan economy – one is the promise of increased revenues in foreign currency.
The other is the likelihood of Sri Lanka meeting the energy needs of its expanding economy by tapping into local sources.
On the other hand, the China-funded highway project “will improve the inter-regional connectivity and efficiency of the entire motorway network and will link several provinces and economically important ports, airports and commercial cities,” per the statement issued by Sri Lankan government.
The two massive projects further affirmed the boom time that the Sri Lankan economy is currently going through.