India, UAE, Sri Lanka sign MoU to develop Trincomalee as regional energy hub

New Delhi, Apr 5: In a trilateral initiative aimed at boosting regional energy cooperation, India, the United Arab Emirates (UAE), and Sri Lanka signed a key agreement on Saturday to develop the eastern Sri Lankan city of Trincomalee, one of the deepest natural harbours, into a multi-faceted energy hub. The MoU was signed during Prime Minister Narendra Modi’s visit to Colombo and is seen as a strategic step to enhance energy security and infrastructure while signalling deepening regional cooperation amid increasing Chinese influence in the Indian Ocean.

The MoU envisions a comprehensive development plan for Trincomalee, leveraging its natural deep-water harbour, historic oil tank farms, and strategic location. It includes the construction of a multi-product pipeline and may incorporate the unused portions of the World War II-era oil storage complex, part of which is currently operated by Lanka IOC, a subsidiary of Indian Oil Corporation.

Foreign Secretary Misri emphasised that the framework agreement will now pave the way for designating specific public and private sector entities from all three countries to take the business-to-business discussions forward. “This MoU is structured as a government-to-government framework. The next step involves identifying the entities that will implement these ideas and develop viable energy infrastructure projects on the ground,” he said.

Sri Lanka is expected to gain significantly from this initiative, not only in terms of energy security and affordability but also through potential revenue from energy exports and infrastructure investment. “This is an initiative designed to ensure Sri Lanka’s energy security, provision of energy at affordable rates, and also to possibly contribute revenue through export earnings,” Misri added. The MoU is part of a broader focus on energy cooperation during PM Modi’s visit. Another energy project is an agreement signed during the visit that involved an electricity grid interconnection between India and Sri Lanka, enabling cross-border power trade for the first time.