The United States has announced a $553 million investment in a port terminal in Sri Lanka’s capital, Colombo, which is being developed by Indian billionaire Gautam Adani. This move comes as both Washington and New Delhi seek to counter China’s influence in South Asia.
The funding, provided by the International Development Finance Corp. (DFC), reflects renewed efforts by the US and India to reduce Beijing’s control over Sri Lanka. In recent years, Sri Lanka heavily borrowed from China for port and highway projects, resulting in an economic crisis. For Adani, the US investment may help restore the conglomerate’s reputation after allegations of fraud caused significant losses earlier this year.
The deepwater West Container Terminal in Colombo is the DFC’s largest infrastructure investment in Asia and one of its largest globally. The DFC stated that it will enhance Sri Lanka’s economic growth and promote regional economic integration, particularly with India, a key partner for both countries.
This funding is part of the DFC’s overall effort to increase investments, which amounted to $9.3 billion in 2023. A US official described the financing of the Sri Lanka port as a demonstration of the US commitment to being more involved in development projects across the Indo-Pacific region.
China has been the largest foreign direct investor in Sri Lanka, with investments totaling around $2.2 billion as of last year. US officials have publicly criticized the Hambantota port in southern Sri Lanka, which is rarely used and considered unsustainable, as part of China’s “debt-trap diplomacy.”
The DFC will collaborate with sponsors John Keells Holdings Plc and Adani Ports & Special Economic Zone Ltd., relying on their local expertise and high-quality standards.
Colombo’s port is one of the busiest in the Indian Ocean due to its strategic location along international shipping routes. It handles nearly half of all container ships passing through its waters. The DFC noted that the port has been operating at over 90% capacity for the past two years and requires additional capacity.
Established under the Trump administration, the DFC aims to support developing nations while advancing US foreign policy objectives. Initially hindered by the Covid-19 pandemic, the agency has accelerated funding in recent years. A report from the AidData institute at William & Mary in Virginia indicates that the DFC has helped the US narrow the development spending gap with China’s more prominent Belt and Road Initiative.
Scott Nathan, CEO of the DFC, stated that the funding will contribute to “greater prosperity for Sri Lanka without adding to sovereign debt” and strengthen the position of US allies in the region.
(Note: This article is published from a syndicated feed and has not been edited by NDTV staff, except for the headline. New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
