The tie-up between Washington and New Delhi, for the first time, to counter the growing Chinese influence in Sri Lanka. Last Wednesday, the United States Embassy in Colombo announced that the country’s International Development Finance Corporation (DFC) was committing over U$ 530 million to help the development of a deepwater shipping container terminal at the Colombo Port. The announcement said the assistance would go to the joint venture by Adani and John Keells.
A nuanced news release (see highlighted in black) from the US Embassy added:
“The new terminal reflects DFC’s commitment to financing high-quality infrastructure that supports its partner’s development needs, invests in local communities, and is respectful of local financial conditions. The investment further demonstrates the United States’ enduring commitment to Sri Lanka’s economic growth and its regional economic integration, including with India.
“DFC Chief Executive Officer (CEO) Scott Nathan travelled to Sri Lanka to launch $553 million in financing to Colombo West International Terminal Private Limited to support the development of the deepwater West Container Terminal located within the Port of Colombo.
“DFC works to drive private-sector investments that advance development and economic growth while strengthening the strategic positions of our partners. That’s what we’re delivering with this infrastructure investment in the Port of Colombo,” said DFC CEO Scott Nathan. “Sri Lanka is one of the world’s key transit hubs, with half of all container ships transiting through its waters. DFC’s commitment of $553 million in private-sector loans for the West Container Terminal will expand its shipping capacity, creating greater prosperity for Sri Lanka – without adding to sovereign debt – while at the same time strengthening the position of our allies across the region.”
‘U.S. Ambassador to Sri Lanka Julie Chung said, “The $553 million investment by DFC for the long-term development of the Port of Colombo’s West Container Terminal will facilitate private-sector-led growth in Sri Lanka and attract crucial foreign exchange inflows during its economic recovery. This financing is symbolic of the United States’ long-standing commitment to the development and well-being of the people of Sri Lanka. Sri Lanka regaining its economic footing will further our shared vision for a free and prosperous Indo-Pacific.”
“This investment models how DFC operates, supporting projects that are strategic, economically sound, and led by the private sector. DFC is working with world-class sponsors John Keells Holdings and Adani Ports & Special Economic Zones Limited (APSEZ). These companies’ local experience and high-quality standards will help support local jobs and make this project a long-term, sustained success for the Indo-Pacific.
“The Port of Colombo is the largest and busiest transshipment port in the Indian Ocean. It has been operating at more than 90 percent utilization since 2021, signalling its need for additional capacity. The new terminal will cater to growing economies in the Bay of Bengal, taking advantage of Sri Lanka’s prime position on major shipping routes and its proximity to these expanding markets.
“The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.”