A memorandum of understanding on cooperation in economic projects signed between India and Sri Lanka during Sri Lankan Prime Minister Ranil Wickremesinghe's visit here on Wednesday is aimed at achieving "greater economic, investment and development cooperation in a progressive manner", a senior official said on Thursday.

"There are traditionally close and friendly relations between the two countries and also continuing endeavours to enhance bilateral relations through increased economic, investment and development cooperation," External Affairs Ministry spokesperson Gopal Baglay said in his weekly media briefing here.

He said the Indian government, which has been focused on "Sabka Sath Sabka Vikas" internally was now extending this to the neighbourhood too.

"In this backdrop, with the objective to achieve greater economic, investment and development cooperation in a progressive manner, through joint ventures and other cooperative activities that will ensure the well-being of the people of the two countries, the two governments signed yesterday this Memorandum of Understanding on Cooperation in Economic Projects," he stated.

According to the spokesperson, among the main areas and the scope of cooperation under this MoU are: a regassified liquefied natural gas (LNG)-fired 500 MW capacity LNG power plant; an LNG terminal /floating storage regassification unit (FSRU) in Colombo/Kerawalapitiya; a 50 MW solar power plant in Sampur; and an upper tank farm in Trincomalee that will be jointly developed by India and Sri Lanka.

"As you would be aware, Lanka IOC has had the rights to develop the tank farm since 2003," Baglay said.

"At present, only lower tank farm is developed. However, Lanka IOC had rights to fully develop the project. Given our spirit of partnership, we proposed to Sri Lanka to develop upper tank farm as joint venture."

Baglay said that according to the MoU, a joint working group will be set up to further discuss and flesh out details for a port, petroleum refinery and other industries in Trincomalee.

The cooperation will also extend to industrial zones and special economic zones in identified locations in Sri Lanka;

Important road segments like Mannar-Jaffna, Mannar-Trincomalee and Dambulla-Trincomale Expressway would be developed with Indian investment.

Other projects coming under the ambit of the MoU include: the railway sector development in Sri Lanka including new projects for track upgrade and purchase of rolling stock; a container terminal in Colombo port as a joint venture; and agricultural sector and livestock development in Sri Lanka.

"The MoU is thus in the nature of an agenda on a roadmap for the future," Baglay said.