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The new oil refinery will be built near the port of Hambantota
Sri Lanka announced Tuesday that a foreign joint venture had committed $ 3.85 billion in a new oil refinery, the largest foreign investment in the country's history.
The Sri Lanka Investment Board announced that the construction of the refinery and storage facility, jointly funded by the Ministry of Oil and Gas of Oman and a company registered in Singapore, would start this weekend.
Deputy Minister of International Trade Nalin Bandara said he expects the refinery, which will produce 200,000 barrels a day, to be fully operational within four years.
"This is the biggest foreign investment (in the history of Sri Lanka)," he told reporters in Colombo.
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This is double the largest foreign investment, a $ 1.4 billion land reclamation project near the port of Colombo.
Oman will finance 30% of the new oil project, while Singapore-based Silver Park International, which is majority-owned in India, will finance the rest.
It is being built near the port of Hambantota, which was leased to a Chinese state-owned company in 2017 for 99 years, after Sri Lanka had been unable to repay a loan from Beijing.
The circumstances surrounding the acquisition of this port by China, along one of the busiest shipping lanes in the world, have caused concern in neighboring India and beyond due to the Beijing's growing presence in the Indian Ocean.
Bandara said new cash lines flowing into the region showed that foreign investors were not discouraged by this experience.
"The latest investment shows that companies from other countries are also interested in a visit to Hambantota," said Bandara.
Sri Lanka attracted a record $ 2.37 billion in foreign direct investment, an increase of 38 percent over the previous year, according to official figures.
Several important proposals were set aside late last year when Sri Lanka recovered from a constitutional crisis as rival factions of the government claimed the right to govern the country.
Calm was restored after the Supreme Court ruled that President Maithripala Sirisena acted illegally when he dismissed his prime minister and parliament and called for early elections.
Opponents of Sirisena accused the president of annoying foreign investors at a time when Sri Lanka is in desperate need of reviving its struggling economy.
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