US Commits 553 Million Dollar: The US International Development Finance Corporation (DFC) has pledged $553 million in financing for a port terminal project in Colombo, Sri Lanka. This project, which includes the West Container Terminal (WCT), marks the first venture into the sector by an Indian company, the Adani Group.
Sri Lanka, currently grappling with its most severe financial crisis in over seven decades, has seen its economy contract by 7.8% in 2022 due to dwindling foreign exchange reserves. The Adani Group, under the stewardship of Indian billionaire Gautam Adani, owns a 51% stake in the WCT. Another terminal in the port is managed by China Merchants Port Holdings Co Ltd.
The DFC‘s commitment to provide private sector loans for the WCT is expected to enhance the port’s shipping capacity, fostering economic growth in Sri Lanka without increasing the country’s sovereign debt burden. DFC CEO Scott Nathan stated, “DFCs commitment of $553 million in private sector loans for the West Container Terminal (WCT) 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.”
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India played a pivotal role in supporting Sri Lanka during its financial crisis by providing approximately $4 billion in swaps and credit lines, which were essential for importing vital commodities like fuel, medicine, and fertilizer.
Sri Lanka, strategically located near busy shipping routes, has become a focal point of influence competition between India and China. The WCT project involves a consortium where the John Keells Holdings conglomerate owns a 34% stake, with the remaining share held by the state-run Sri Lanka Ports Authority (SLPA).
The dredging work for the terminal began in November last year, with the first phase scheduled for completion by the third quarter of 2024, and the entire project expected to conclude by the end of 2025. This substantial investment signifies a significant step in strengthening regional ties and expanding Sri Lanka’s economic prospects.
Our Reader’s Queries
Which US invests US $553 million in Adani developed Sri Lanka port?
In a bid to rival China’s international development financing, the US has unveiled plans to construct a deep-water shipping container terminal at Sri Lanka’s Port of Colombo. The project, which is set to cost $553 million, is aimed at boosting the country’s shipping capabilities and strengthening its position in the global market. This move is part of the US’s ongoing efforts to expand its influence in the region and establish itself as a key player in international trade.
Is the US to fund $553 M deep sea terminal in Sri Lanka?
Officials have announced that the Port of Colombo will receive over $550m from the United States for the development of a deep-sea container terminal. This move is seen as a strategic response to China’s growing influence in the Indian Ocean, as the US seeks to compete with China in international development financing. The investment will bolster the shipping container terminal in Sri Lanka, positioning it as a key player in the region’s trade and commerce.