India, Sri Lanka, UAE unveil ambitious initiative for energy cooperation

India, Sri Lanka and the United Arab Emirates on Saturday firmed up an ambitious agreement to develop Trincomalee as an "energy hub" with a broader aim to help Colombo to achieve energy security and fuel its economic growth.

The pact was signed following wide-ranging talks between Prime Minister Narendra Modi and Sri Lankan President Anura Kumara Dissanayake. 

To expand their energy ties, India and Sri Lanka also concluded a separate pact on electricity grid interconnection, a project that has been on the drawing board for some time.

On the tripartite energy pact, Foreign Secretary Vikram Misri said it is an initiative designed to ensure Sri Lanka's energy security, provisioning of energy at affordable rates, and also to contribute revenue to the island nation through export earnings from energy.

Explaining the pact, Misri said at a media briefing that the pact is a government-to-government MoU in order to provide the enabling framework, and to set out some of the broad terms of reference for the cooperation.

"The immediate next step that will be enabled by this framework MoU is the identification and the nomination of specific agencies and entities that could be government entities or private sector entities or could be entities related to the governments themselves that will try and realise the business-to-business part of this agreement," he said.

Misri said the actual projects that will be carried out will be discussed in detail by the designated business entities of the three sides.

"The United Arab Emirates (UAE) is a major energy partner for India. It is a strategic partner for India in the energy space, and it was therefore an ideal partner for this particular exercise that is being done for the first time in this region," he said.

The foreign secretary said the exact contours of the role to be played by them will be clear after the business-to-business discussions kick off.

"Insofar as the components of the activities are concerned, I think somebody asked about a multi-product pipeline. That is certainly one of the things that will be discussed under this particular MoU," he said.

"It is something that has been under discussion bilaterally also between India and Sri Lanka, but this is one of the projects which will be covered under this trilateral MoU," he said.

The foreign secretary indicated that there could be a couple of other areas for cooperation and in this context referred to tank farms in Trincomalee.

"Some of them are already being developed and utilised by Lanka IOC, but there are many more that are lying unused, and have not been put to use as yet," he said.

The Lanka IOC is a subsidiary of the Indian Oil Corporation and it operates retail petrol and diesel stations in the island nation.

"There is a possibility that they (unused tank farms) will also be developed and utilised under this particular MoU," Misri added.

He further said: "I imagine that once the entities get together, they will look at all issues related obviously to financing, to feasibility, to viability, etc., and come up with the projects that can be taken forward on the ground."  In line with the broader framework of India-Sri Lanka energy cooperation, Modi and Dissanayake also virtually inaugurated the construction of the Sampur solar power project.

Modi arrived in the Sri Lankan capital last evening after concluding his trip to Bangkok where he attended a summit of the Bimstec (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation).