US offers $553 mn Financing for Adani Project at Sri Lanka Port
In bid to limit China's influence in South Asia, the US will contribute $553 million to the development of a port facility in the capital of Sri Lanka by Indian billionaire Gautam Adani.
The US government agency's largest infrastructure investment in Asia and one of its largest worldwide is the finance for the deepwater West Container Terminal in Colombo provided by International Development Finance Corp. It is expected to support the economic expansion of Sri Lanka as well as "its regional economic integration, notably with India, a vital partner to both countries”, DFC said in a statement.
The US funding suggests that efforts to lessen Beijing's influence over Sri Lanka are resumed after the country overspent on Chinese port and highway projects prior to last year's economic collapse, leaving it heavily indebted to Beijing. India aspires to shift the regional power dynamics as well.
The funding is a component of the $9.3 billion worldwide DFC investment acceleration programme for 2023. According to a US official, US involvement in development projects in the Indo-Pacific is demonstrated by the financing of the port in Sri Lanka. China, the island nation's largest foreign direct investor, had made approximately $2.2 billion in investments as of the end of the previous year. Publicly, US officials have denounced Sri Lanka's little-used southern Hambantota port, claiming it is part of China's "debt-trap diplomacy" and unsustainable.
According to DFC, it will collaborate with sponsors Adani Ports & Special Economic Zone Ltd. and John Keells Holdings Plc., depending on their “local experience and high-quality standards”. Because of its close proximity to international shipping lines, the port of Columbo is among the busiest in the Indian Ocean. All container ships travel through its waters in over half of cases. The DFC stated that it need additional capacity despite running at over 90% utilisation for the past two years.