India, UAE Partner with Sri Lanka to Launch Energy Hub

India and the United Arab Emirates have agreed to jointly develop a strategic energy hub in Sri Lanka, a move seen as part of New Delhi’s efforts to strengthen regional ties and counter growing Chinese influence on the island.

The tripartite agreement was signed during Indian Prime Minister Narendra Modi’s visit to Colombo — the first by a foreign leader since Sri Lankan President Anura Kumara Dissanayake assumed office in September.

India’s Foreign Secretary Vikram Misri told reporters that the project will be based in Trincomalee, a key natural harbour in eastern Sri Lanka. Plans include a multi-product pipeline and potential use of a World War II-era oil tank farm, partly owned by Indian Oil Corp’s local subsidiary.

“The UAE is a strategic energy partner for India, making it an ideal collaborator for this initiative — a first of its kind in the region,” Misri said. Business-to-business talks will determine the UAE’s exact role in the project.

The announcement highlights India’s expanding energy diplomacy, especially as China’s Sinopec moves forward with a $3.2 billion oil refinery project in Sri Lanka’s southern port of Hambantota.

India and Sri Lanka also finalised their debt restructuring deal. Colombo owes approximately $1.36 billion to India’s Exim Bank and State Bank, according to Sri Lanka’s Finance Ministry.

During the visit, Modi inaugurated a $50-million solar power project, a collaboration between India’s National Thermal Power Corp and Sri Lanka’s Ceylon Electricity Board.

Additional agreements were signed covering power grid connectivity, digital infrastructure, healthcare, and security cooperation, as India deepens its support for Sri Lanka’s economic recovery following its 2022 debt default.