BOI approves over US $ 5bn investments in 1Q

By Nishel Fernando 
The Board of Investment (BOI) has approved an estimated US $ 5.1 billion worth of new investment projects in the first quarter of this year, including a steel plant project to be set up in Trincomalee, with an investment of US $ 1 billion, the latest BOI statistics showed.

An estimated US $ 4.9 billion worth of investments will be foreign direct investments (FDI), while US $ 168 million will be local investments.

In addition, the BOI also approved 13 expansion projects, worth of estimated US $ 142 million, by firms already registered under the BOI.  

A large chunk of investments worth US $ 3.9 billion will go into the utility sector, which includes a US $ 3.85 billion joint venture between India-based Accord Group and Omani state-controlled Oman Oil Co, to set up an oil refinery in Hambantota.

Oman Oil and Gas Minister Mohammed bin Hamad Al Rumhy last weekend joined Prime Minister Ranil Wickremesinghe to lay the foundation stone for the oil refinery in Hambantota. 

Meanwhile, an estimated US $ 1.2 billion worth of investments will go into the manufacturing sector, which includes a US $ 1 billion investment to set up a steel plant in Trincomalee.

The Development Strategies and International Trade Ministry is currently in the process of transferring a 500 to 700-acre land in Trincomalee, nearby the Trincomalee harbour, to the BOI, in this regard.

A Singapore-based firm, which is the main investor of the project, plans to set up the plant targeting steel exports to the region.

The BOI also approved US $ 30 million worth of investment projects into Sri Lanka’s apparel sector and another US $ 18 million worth of investments into the agriculture sector. 

Furthermore, an estimated US $ 17 million investment will also be made into the service sector.

The Development Strategies and International Trade Minister Malik Samarawickrama noted that the majority of investments are expected to realise within two to three years. 

These investment projects are expected to generate over 8000 employment opportunities in the country. 

Development Strategies and International Trade Deputy Minister Nalin Bandara recently said that the first stage of recently inaugurated Bingiriya industrial zone has attracted interest from several firms, including Smart Shirts, Brandix, Colombo Dockyard and Sanmik Foods, to set up their plants in the zone.

As the space runs out in the zone, Bandara said that the second stage of the zone would be launched soon on a 284-acre land, while an additional 630-acre land would also be added to the zone in the future. 

Sri Lanka attracted US $ 2.3 billion worth of FDI last year, falling short of the US $ 2.5 billion target, despite a 38 percent year-on-year increase from the US $ 1.78 billion recorded in 2017. 

According to the BOI, 52 percent of investments came from projects approved prior to 2015, while the remaining 48 percent was received from projects approved after 2015.

BOI Director General Champika Malalgoda noted that Sri Lanka is now attracting more investment into the tradable sector, moving away from the environment where the majority of investments flowed into the non-tradable sectors such as property development.  

She expressed her confidence in achieving the targeted US $ 3 billion in FDI this year, with the realisation of big-ticket investments.