Iranian President Mahmoud Ahmadinejad is in Sri Lanka on the second leg of his tour of South Asia.
Mr Ahmadinejad will visit a refinery and hydro-electric and irrigation schemes that have received Iranian aid.
Iran is emerging as a major economic donor in Sri Lanka which is under pressure on human rights issues as war has resumed with the Tamil Tigers.
Mr Ahmadinejad held talks in Pakistan on Monday, and is also due to visit India during his trip to the region.
Policy shift
Sri Lanka's government has hailed his visit as cementing relations with Iran.
The capital is festooned with flags, and bill boards proclaiming "Traditional Asian Solidarity".
The BBC's Roland Buerk in Colombo says the island nation is slowly turning towards Asian countries which offer more donor money than traditional Western allies as well as less criticism over human rights.
Foreign Secretary Dr Palitha Kohona told the BBC: "Asians don't hector each other from public pulpits. They're more ready with assistance and less ready with gratuitous advice."
Our correspondent says Sri Lanka has come under pressure from some countries over its human rights record as war has resumed with Tamil Tiger rebels fighting for independence in the island's north and east.
In March a US state department report accused government forces and allied militias of unlawful killing, torture, hostage-taking and extortion with impunity.
During his visit President Ahmadinejad will tour development projects which Iran is helping to fund.
Iran has already agreed soft loans and grants of $1.9bn for a hydroelectric and irrigation scheme and to upgrade a refinery, as well as to buy Iranian oil.
China has also come forward with money for a new port and other projects.
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