INDIA'S Accord Group and Oman's Ministry of Oil and Gas have signed a $3.85 billion (£2.91bn) deal to build an oil refinery in Sri Lanka, the biggest single pledge of foreign direct investment ever made in the country.
Sri Lankan officials said the 200,000 barrel-per-day refinery will be built on 585 acres near the site of the new Hambantota international port and a related industrial zone on the nation's southern coast.
The refinery, construction of which is expected to begin on March 24 and be completed in 44 months, is set to produce nine million metric tonnes of refined products a year for export from the Hambantota port, which serves the busiest East-West shipping route.
Privately owned Accord Group will control 70 per cent of the joint venture and the Sultanate of Oman's Ministry of Oil and Gas the rest.
Accord's ownership comes through a Singapore investment vehicle which is 90 per cent owned by its Silver Park International Pvt Ltd operation.
China's separate £1bn financing of facilities on reclaimed land near the nation's main Colombo port is currently the island's biggest single foreign direct investment.
The refinery will be Chennai-based Accord's first foray into oil refining. Its current interests include power generation, brewing and healthcare.
The joint venture plans to invest £1.42bn in share capital and £1.47bn via loans, according to the project document.
"With this refinery, our exports will grow by £5.28bn per year," Nalin Bandara Jayamaha, Sri Lanka's deputy minister of development strategies and international trade, told reporters at a news conference in Colombo.
The industrial zone at Hambantota has been delayed by a land acquisition process which has been hit by protests by local residents.
Mangala Yapa, an advisor to Sri Lanka's development strategies ministry, said 200 acres to house the venture's oil tanks were already available and another 385 acres are being acquired, while an environmental impact assessment is underway.
"We are doing a site-specific EIA (environmental impact assessment). Since already there are oil tanks in Hambantota, we do not see any issues," Yapa said.
An official at Singapore-based Silver Park International Pte Ltd confirmed the refinery investment.
(Reuters)
Piyush Goyal with shadow chancellor Rachel Reeves (centre), Vikram Doraiswami and other officials at the India Global Forum
And , Goyal with Jonathan Reynolds