BOT refinery interest in Sri Lanka has surged as the government confirmed receiving 20 investor responses for a new build-operate-transfer refinery at the Sapugaskanda petroleum complex. Authorities say the project is moving steadily toward its next procurement phase.
BOT refinery interest rises as Sri Lanka moves to final evaluation stage
Sri Lanka’s plans to strengthen its energy infrastructure have taken a significant step forward following confirmation that the government has received 20 expressions of interest for establishing a build-operate-transfer refinery at the Sapugaskanda petroleum complex. The Energy Minister Kumara Jayakody announced in parliament that the closing date for applications was September 26, signaling strong BOT refinery interest from both regional and international investors seeking to enter the country’s expanding energy sector.
The proposed refinery, designed to handle a capacity of 100,000 barrels per day, is positioned as one of Sri Lanka’s most ambitious energy development projects in recent years. According to the minister, the evaluation process for the submitted expressions of interest is now in its final stages. Once the assessment is completed, Requests for Proposals will be issued under the established government procurement framework. This next step will invite shortlisted investors to present detailed plans, financial structures, and technical outlines for the refinery’s development and long-term operation.
Officials note that the new refinery is expected to play an integral role in meeting the domestic fuel requirements of the Ceylon Petroleum Corporation. At present, Sri Lanka relies heavily on imported refined petroleum products, exposing the country to price volatility and supply disruptions. By developing a high-capacity facility within the Sapugaskanda complex, the government aims to reduce dependency on external suppliers and strengthen energy security. Beyond domestic supply, the refinery is expected to contribute to bunkering operations and generate export revenue, with policymakers envisioning the country as a future energy and logistics hub in the region.
Land acquisition remains a key component of the project’s preparatory phase. The Energy Minister confirmed that approximately 785 million rupees has been allocated for securing additional land needed for the expansion of the Sapugaskanda complex. Of this amount, 510 million rupees has already been advanced, indicating steady progress in completing the groundwork necessary for construction. These investments reflect the government’s long-term commitment to developing infrastructure capable of supporting large-scale energy operations.
The minister also highlighted that a feasibility study for the refinery was completed in 2022 at a cost of around 600,000 US dollars, equivalent to roughly 137 million rupees at the time. This study provided critical technical assessments, cost evaluations, logistical analyses, and environmental considerations required to move forward with procurement and land acquisition. The findings reinforced Sri Lanka’s strategic advantage in positioning Sapugaskanda as a key energy hub due to its proximity to major shipping lanes and its long-established petroleum infrastructure.
As Sri Lanka continues to navigate economic recovery and restructuring, the government has increasingly prioritized investment-driven growth, especially in sectors with long-term strategic value. Energy remains one of the most critical pillars in that strategy. A new refinery built on BOT terms is expected to bring substantial foreign investment, technology transfer, and employment opportunities, while reducing the fiscal burden associated with fully state-funded infrastructure projects. BOT models remain attractive to governments seeking to accelerate development without incurring unsustainable debt, and the strong BOT refinery interest signals investor confidence in the viability of the Sapugaskanda project.
However, the path ahead remains complex. Large-scale energy projects often face delays stemming from regulatory approvals, environmental impact clearances, and community consultations. Ensuring transparency during the procurement and proposal evaluation phases will be essential to maintaining investor confidence and avoiding setbacks. Government officials have stressed that the process will be handled in accordance with established guidelines to ensure fairness and competitiveness.
The broader economic implications of the refinery extend beyond energy supply. With Sri Lanka aiming to bolster its position as a regional maritime and logistics center, increasing its fuel refining capabilities could strengthen the country’s role in international shipping routes. The export potential of refined petroleum products would not only boost foreign revenue but also support job creation and downstream industries linked to petrochemicals, transport, and bunkering services.
The government’s announcement of strong investor participation marks a promising milestone but also sets the stage for significant work ahead. As the evaluation of expressions of interest nears completion, stakeholders are closely watching the next phase to see which investors formally proceed to the proposal stage. The eventual development of the Sapugaskanda BOT refinery could reshape the nation’s energy landscape, enhance supply resilience, and contribute meaningfully to long-term economic stability.