On 6 January 2022, Sri Lanka has signed a deal with the local unit of Indian Oil Corp, Lanka IOC, to lease 75 oil tanks as the island moved closer to securing a $500 million fuel credit line from India.

Sri Lanka has been facing its worst financial crisis in decades. Its foreign exchange reserves are dwindling, and nearly $4.5 billion worth of debt repayments are due in 2022, prompting it to look at innovative ways to bring in foreign exchange.

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According to the new pact, Lanka IOC will have 14 tanks on a 50-year lease while its joint venture with state-run Ceylon Petroleum Corporation (CPC), the Trinco Petroleum Terminal Pvt. Ltd will develop 61 oil farms. CPC will use the remaining 24 tanks.

“This agreement will nullify the lease agreement entered into by the two countries in 2003 and bring the tank farm under a new governance structure,” Sri Lanka’s energy ministry said in a statement on Thursday.