Sri Lanka defies US warning of sanctions to host Iranian president

Iran’s President Ebrahim Raisi and his delegation landed in Sri Lanka to inaugurate the Uma Oya Hydropower project this morning, just hours after the United States warned that it could impose sanctions on countries engaging in trade with Iran.

“Just let me say broadly, we advise anyone considering business deals with Iran to be aware of the potential risk of sanctions,” Vedant Patel, Deputy Spokesperson of the US State Department said. 

Patel was responding to questions regarding the recent visit of the Iranian president to Pakistan, during which the two nations inked eight Memoranda of Understanding (MoUs) and pledged to elevate bilateral trade to USD $10 billion. “But ultimately, the government of Pakistan can speak to their foreign policy pursuits,” Patel added.

Following Raisi’s visit to Pakistan, he arrived in Sri Lanka today with a trade delegation. Security was beefed up in Colombo including the deployment of armed personnel in anticipation of the visit. Roads leading to the Uma Oya powerplant were restricted and security was heightened along the route.

Opening the USD $514-million hydropower project, Raisi pledged to support development projects in Sri Lanka by providing technical and engineering services. Sri Lanka and Iran are set to sign five pacts or Memorandums of Understanding (MoUs) during the visit.

"It is indeed a tremendous honour to be involved in such a symbol of unity, one that deepens the bond between our nations," Raisi said. “It is worth noting that this project stands as a testimony to the friendship shared between Iran and Sri Lanka.”

“I assure you that Iran is eager to forge a strong partnership with Sri Lanka, poised to contribute to its growth and development. Iran stands prepared to offer technical and engineering services for significant development initiatives in Sri Lanka.”

“Iran’s technological prowess has spread across all fields,” said Sri Lankan president Ranil Wickremesinghe. “It should also be said that Iran is a country that maintains its own technological development. Therefore, we should strengthen the common points of both countries. We are all countries of the Global South. Such projects are very important at a time when the countries of the Global South are establishing their identity and independence.”

Iranian Energy Minister Ali Akbar Mehrabian said that “it is crucial to highlight the significance of this meeting between the Presidents of Iran and Sri Lanka, marking a pivotal moment for both countries”. 

“Fostering a stronger bond between Iran and Sri Lanka not only facilitates technical and economic collaboration but also lays the groundwork for continued advancement in the future.”

Raisi is 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.

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.

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.