COLOMBO, (Reuters) – Iranian President Mahmoud Ahmadinejad launched a project to boost the capacity of Sri Lanka’s main oil refinery on Tuesday, part of a $1.5 billion loan to the government as Iran extends its energy ties in South Asia.
Ahmadinejad’s visit came as President Mahinda Rajapaksa, increasingly isolated over criticism from Western countries about its human rights record in a 25-year-old civil war with Tamil Tiger separatists, seeks closer ties with Asian countries.
Ahmadinejad, who visited Pakistan in Monday to seal a $7.6 billion pipeline deal opposed by the United States, will travel later on Tuesday to India, which is also interested in the pipeline to feed its booming economy. “We can ensure security and fair play for all … but in the world some powerful nations do not allow such a situation and they have created divisions among people and nationalities,” Ahmadinejad said at the launch in remarks through an interpreter.
“The peoples of Sri Lanka and Iran are against the policies of the nations who are the enemies of the humanity.”
Iran had pledged a $1.5 billion loan to fund a raft of infrastructure projects in Sri Lanka, including boosting oil refinery capacity and a 100-megawatt hydropower project.
The project aims to boost production of Sri Lanka’s existing Sapugaskanda oil refinery in Colombo from 50,000 barrels per day to 100,000 bpd.
Hours before Ahmadinejad arrived in Colombo, the national power grid crashed for the second time in a month, underlining the precarious state of Sri Lanka’s infrastructure.
Building new or upgrading existing infrastructure has been a low priority in the island nation because of the civil war between the state and Tamil Tiger rebels that has killed more than 70,000 people.
In Islamabad on Monday, Iran and Pakistan said they had settled all issues relating to plans for the gas pipeline.
Linking the world’s second-largest gas reserves to the fast-growing South Asian economies, it could be completed by 2012.
The pipeline will be top of the agenda when Ahmadinejad travels to India.
It would initially transport 60 million cubic metres of gas (2.2 billion cubic feet) daily to Pakistan and India, half for each country, but capacity would be raised later to 150 million cubic metres.