ECONOMYNEXT – Sri Lanka has revised down its 2023 Foreign Direct Investment target to $1 billion from earlier $1.5 billion, but hopes two metal processing plants and an oil refinery in the investment zone of Chinese controlled Hambantota Port could help surpass the latest target.
The island nation has suffered with an unprecedented economic crisis and has declared bankruptcy with sovereign debt default in April last year. Since then it has seen an economic recovery with the assistance of a $3 billion IMF loan programme, but the island nation is yet to recover to its pre economic crisis level.
State Investment Minister Dilum Amunugama in July said the target set by the Board of Investments (BOI) for FDI for 2023 was $1.5 billion with the first quarter of 2023 amounted to $211 million.
However, on Friday, the minister said the 2023 target was $1 billion without any reason for the downward revision.
Amunugama said the island nation has signed FDI worth $701 million in the first nine months of this year.
“These are also signed, part of the funds remitted, and BOI payments made,” he told reporters in Colombo at a media briefing on Friday (13).
“Our target is generally $1 billion. If we are lucky, we can kick off the refinery this year. I am also pushing hard on two more metal processing projects as well.”
$4 BLN REFINERY
The Government has already shortlisted only Singapore’s Vitol and China’s Sinopec to invest a minimum of $4 billion to build a new oil refinery in Hambantota.
Government officials have said the final decision on the refinery is likely to be taken soon with Sinopec having a greater chance of winning the tender. Sources close to President Ranil Wickremesinghe have said a discussion on the oil refinery is on the card during his four-day visit to China.
“On the refinery, the tender has been opened. It has not been awarded yet. We (BOI) have given the land. Whoever gets the land can start building in the land,” Amunugama said
When asked if the oil refinery is already awarded to Chinese Sinopec, Amunugama said: “I have not officially been told. The financial analysis is going on. We have decided the land. The timeline is not decided yet.”
He also said the BOI is fast tracking two metal processing plants in the Hambantota investment zone where China will be dominating without revealing the names of investors.
“One is $280 million and the other one is $250 million. So if we are lucky, we will be able to overshoot our target, which is $1 billion,” Amunugama said.
The two metal processing plants will be manufacturing metal sheets.
“One is a project that brings crushed cars in an environmentally friendly form where oil and gases are taken out. They are reproduced into the sheets,” he said.
“The other one is copper, which comes in crushed form, which will be converted into row materials and copper sheets. One project is roughly about 500 container movements a week from Hambantota port.” (Colombo/Oct 15/2023)