Colombo, Nov 8 (EFE).- The United States has decided to invest over half a billion dollars to support a Sri Lankan port project, developed by Indian billionaire Gautam Adani, as part of efforts by Washington and New Delhi to counteract Chinese influence in the crisis-ridden island nation.
The announcement about “the development of a deepwater shipping container terminal in the Port of Colombo” was made by Scott Nathan, head of the US International Development Finance Corporation (DFC), in the Sri Lanka capital on Wednesday.
Nathan told reporters that the financing would create jobs and support Sri Lanka’s economic growth.
He said the US was investing in “a project that makes a difference for the national economy and truly for the international economy by having more capacity for deepwater transshipment.”
“(The) commitment of $553 million in private-sector loans for the…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.”
The new Colombo port terminal will be designed for deepwater container storage, expanding transport capacity in the Indo-Pacific region.
Construction of the terminal began two years ago, driven by the Indian company Adani Ports, which owns 51 percent of the terminal and is part of the Adani Group led by Indian tycoon Gautam Adani.
Adani Ports head Karan Adani said the new project “marked a special occasion not just for the geopolitical relations between Sri Lanka and India, but also between India and the US.”
“We see this as a reaffirmation by the international community of our vision, our capability, and our governance.”
The loan aims to counter the growing Chinese investments in Sri Lanka.
US authorities say it will help reduce congestion at the capital’s port, which has been operating at 90 percent of its capacity since 2021.
“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,” US Ambassador to Sri Lanka Julie Chung said in a statement.
“This financing is symbolic of the United States’s 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.”
Sri Lanka’s strategic geographical location places it at the center of growing regional tensions from China’s expansion in the Indo-Pacific as India and the US seek alliances to counterbalance Beijing’s influence.
The Port of Colombo is the largest and busiest transshipment port in the Indian Ocean, and the new terminal will cater to the growing economies in the Bay of Bengal, capitalizing on Sri Lanka’s pivotal position on major shipping routes.
The US investment coincides with Sri Lanka’s severe financial crisis, leading to a suspension of external debt payments a year ago. The island is grappling with high double-digit inflation and severe shortages of fuel, food, medicines, and other essential items.
Sri Lanka received a $3 billion bailout from the International Monetary Fund (IMF) in March. EFE