Sri Lanka Infrastructure
Projects & Investments

Port City Colombo is Sri Lanka’s most ambitious urban development project — a 665-acre reclaimed land area adjacent to Colombo’s existing port, developed by China Harbor Engineering Company. It has reached its 11th year of development and is designed to become a world-class international financial and commercial hub within the Indian Ocean region.

The project has its own dedicated legislative framework under the Colombo Port City Economic Commission Act, No. 11 of 2021, which established the Colombo Port City Economic Commission (CPCEC) as the single-window regulator for all business activity within the zone.

In January 2026, the Sri Lankan government approved US$1.2 billion in investment projects within Port City, signalling an acceleration of development momentum.

Port City Key Features

• 665 acres of fully reclaimed land
• 100% foreign ownership permitted in all sectors
• Dedicated tax incentive framework (up to 25-year full exemption for BSI entities)
• Guaranteed capital and profit repatriation
• Single-window regulation via CPCEC
• Direct connectivity to Colombo Port — 17th best-connected globally
• Adjacent to the Colombo-Katunayake Expressway

Located on Sri Lanka’s southern coast along the major East-West shipping lane, Hambantota International Port recorded 17.5% cargo growth in 2025, cementing its position as a rapidly developing commercial and industrial hub. The port is operated under a long-term concession arrangement with China Merchants Port Holdings.

The most significant upcoming development is the proposed Sinopec Oil Refinery, a US$3.7 billion project committed to finalization by President Dissanayake in January 2025. If completed, it would be the largest FDI project in Sri Lankan history.

Hambantota Development Pipeline

• Sinopec Oil Refinery: US$3.7 billion, adjacent to port (under finalization)
• Pharmaceutical Manufacturing Zone: 400 acres, significant tax exemptions; target of 40% domestic pharmaceutical supply coverage and up to US$1 billion in annual exports
• Industrial zone expansion — special economic zone designation
• Logistics hub development leveraging port connectivity
• Marine services cluster development

Sri Lanka’s national expressway network is undergoing significant expansion, with several critical corridors under construction or in planning. The Japan International Cooperation Agency (JICA) has announced the resumption of several large-scale infrastructure projects previously suspended during the economic crisis.

Highway projects are funded through a mix of government budget allocation, JICA bilateral loans, ADB financing, and public-private partnerships, creating multiple entry points for private sector participation.

Key Highway Projects

• E01: Southern Expressway extension to Hambantota
• E03: Katunayake Expressway — Airport to Colombo
• E04: Ruwanpura Expressway — Colombo to Ratnapura
• Central Expressway: Colombo to Kandy corridor (ongoing phases)
• Port City Corridor: Direct high-capacity link from Port City to national expressway network
• JICA-financed road construction — multiple active sites nationwide

Sri Lanka’s energy sector presents urgent investment opportunities driven by the government’s ambitious renewable energy targets and the pressing need to reduce dependence on expensive imported fuel for power generation. With 100% electricity accessibility and 98% grid connectivity already achieved, the focus is shifting to decarbonisation and cost reduction.

A notable development: in February 2025, Indian firm Adani Green Energy withdrew from a proposed US$400 million, 484 MW wind farm project in northern Sri Lanka following government efforts to renegotiate the awarded contract. This underscores the importance of contractual stability for energy investors.

Energy Investment Opportunities

• Solar power generation: Utility-scale and rooftop photovoltaic projects
• Wind energy: Northern and eastern coastal zones with strong wind resources
• Hydropower: Small and medium hydro plant rehabilitation and expansion
• LNG terminal: Development of a liquefied natural gas receiving terminal — under active government consideration
• Smart grid infrastructure: Modernisation of distribution network
• Energy storage: Battery storage systems to support intermittent renewable integration

Beyond Port City Colombo, Sri Lanka has identified 17 mixed-use development sites across the island, all with pre-approved infrastructure connectivity. These sites span all provinces, offering diversified geographic exposure.

US$2.17 billion has been allocated by the government for infrastructure investment supporting these development sites, with a focus on creating self-sustaining economic zones that attract both foreign and domestic capital.

Urban Development Locations

• Colombo Skyline Projects: High-rise mixed-use developments in the CBD and waterfront areas
• Kandy Urban Development: Central city regeneration and cultural tourism infrastructure
• Galle Fort Precinct: Heritage-oriented mixed-use development in the Southern Province
• Jaffna City Development: Post-conflict urban regeneration in the Northern Province
• Trincomalee Development Zone: Eastern Province port city and resort development
• Batticaloa Urban Corridor: Eastern growth corridor development

The State Pharmaceutical Corporation has established a dedicated pharmaceutical manufacturing zone in Hambantota, with 400 acres allocated and significant tax exemptions for foreign manufacturers. This initiative aims to build domestic production capacity to meet 40% of Sri Lanka’s pharmaceutical needs while generating up to US$1 billion in annual export revenue.

Healthcare Infrastructure Investments

• Hospital construction and management partnerships
• Medical equipment manufacturing facilities
• Pharmaceutical production and R&D centres
• Healthcare technology — telemedicine and health IT
• Medical tourism infrastructure — wellness resorts and specialised clinics
• Training institutions for healthcare professionals