The United States has committed to providing $553 million in financing for the development of a port terminal in Colombo, the capital of Sri Lanka. This initiative is in collaboration with billionaire entrepreneur Gautam Adani, and it reflects a broader strategy by both the United States and India to counter China's growing influence in South Asia. The funding comes from the International Development Finance Corp (DFC) and represents a significant investment in the region.
Sri Lanka had previously borrowed heavily from China for various infrastructure projects, such as ports and highways, but faced an economic crisis. The US and India are now aiming to reduce Beijing's sway in Sri Lanka by offering an alternative source of investment. This support also serves as a potential boost to Gautam Adani's conglomerate, which faced allegations of fraud that had adversely affected its market value.
The West Container Terminal in Colombo is the DFC's largest infrastructure investment in Asia and one of its most substantial worldwide. The project is expected to contribute to Sri Lanka's economic growth and enhance its regional economic integration, particularly with India. The DFC's involvement reflects the US commitment to engage in development projects across the Indo-Pacific.
China had previously invested about $2.2 billion in Sri Lanka, making it the country's largest foreign direct investor. US officials have criticized some of China's investments in Sri Lanka, including the southern Hambantota port, as part of what they describe as "debt-trap diplomacy."
The DFC will collaborate with local sponsors, John Keells Holdings Plc and Adani Ports & Special Economic Zone Ltd., leveraging their experience and high-quality standards. Colombo's port is strategically located along major international shipping routes in the Indian Ocean, with nearly half of all container ships passing through its waters. The DFC noted that the port has been operating at over 90?pacity for two years and requires expansion to meet growing demand.
In summary, the US's substantial investment in the Colombo port terminal, in partnership with Gautam Adani and with the cooperation of Sri Lanka, is part of a broader effort to counter China's influence in the region, boost Sri Lanka's economic development, and strengthen ties with India in the Indo-Pacific.