Iranian President Ebrahim Raisi is set to arrive in Sri Lanka on a one-day official visit to inaugurate an Iranian-funded Uma Oya multipurpose development project with 120MW hydropower generation capacity.

Valued at  $529 million, the Uma Oya project was originally scheduled to be completed in 2015, but was suspended once and then later faced delays due to sanctions on Iran and a number of other issues, including overdue payments and Sri Lanka deciding to purchase crude oil from countries other than Iran, upon which Sri Lanka was almost fully reliant on for supplies. 

The Uma Oya project includes the construction of storing water in two reservoirs with dams before being brought through a 23 km tunnel to two turbines located underground and generating hydro-power with a capacity of 120 megawatts and added to the national grid.

After power generation, the water is expected to be brought to three reservoirs while supplying water to 20,000 acres of old and new paddy fields in both the Yala and Maha cultivating seasons. Beyond irrigation, the project meets the drinking water needs of residents in Badulla, Moneragala, and Bandarawela districts.

Earlier this year Sri Lanka recently paid of USD 251 million in dues for crude oil imports via tea exports to Tehran. Sri Lanka signed a deal in December 2021 to offset the export of tea to Iran against the legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company, without busting US sanctions.

“So far $20 million worth of tea has been exported to Iran under the barter trade agreement,“ Sri Lankan Prime Minister Dinesh Gunawardena’s office said in a statement after talks with Iranian Foreign Minister Hossein Amir-Abdollahian.

If the Iranian president undertakes this visit, he will be the first Iranian leader to visit Sri Lanka after Dr. Mahmoud Ahmadinejad arrived in April 2008. Iran and Sri Lanka have close ties with Tehran having supplied $150m worth of arms to Sri Lanka in 2005, barely weeks after the Indian Ocean tsunami devastated the island. In 2007, weeks after LTTE commandos smashed Anuradhapura airbase in ‘Operation Ellalan’, Colombo approached Iran for a loan to replace destroyed aircraft.

The announcement of Raisi’s visit comes just days after Iran fired a barrage of missiles and drones targeting Israeli military establishments, sparking a threat of a wider conflict.

Sri Lanka also enjoys close relations with Israel that have been further strengthened after its assault on Gaza. Sri Lanka recently opened an honorary consulate in Israel and has pledged to send thousands of Sri Lanka to fill job vacancies in Israel.