The US will invest $553 million in Sri Lanka's West Container Terminal in the Port of Colombo, which is partly owned by Gautam Adani's Adani Ports and Special Economic Zones Ltd (APSEZ).
The fund from the US International Development Finance Corporation (DFC), a development finance institution of the US government, is the agency's largest infrastructure financing in Asia, according to Bloomberg.
The Colombo West International Terminal Pvt Ltd is a consortium of Adani Ports, Sri Lanka's leading enterprise John Keells Holdings (JKH) and the Sri Lanka Ports Authority.
APSEZ stated that the US financing “will facilitate private sector-led growth and attract crucial foreign exchange to Sri Lanka to aid in its economic recovery.” It added that this is the first time that a US government agency is investing in an Adani project.
This move is reportedly part of efforts by the US and India to curb China's sway over Sri Lanka and its influence in the Indo-Pacific region. DFC said the investment will boost Sri Lanka’s “regional economic integration, including with India, a key partner to both countries.”
The investment in the deepwater shipping container terminal will create “greater prosperity for Sri Lanka – without adding to sovereign debt – while at the same time strengthening the position of our allies across the region,” Bloomberg quoted DFC Chief Executive Officer Scott Nathan as saying.
The Port of Colombo, the busiest transshipment port in the Indian Ocean, has been operating at more than 90 per cent utilization since 2021, signalling its need for additional capacity, according to Adani Ports.