As reported earlier, the U.S. International Development Finance Corporation (DFC) today announced that it has committed more than half a billion dollars to support the development of a deepwater shipping container terminal in the Port of Colombo, Sri Lanka. This terminal will provide critical infrastructure for the South Asian region.
This marks one of the most significant investments by a foreign government entity in collaboration with a foreign private entity, Adani, in Sri Lanka. Adani has entered into a Build-Operate-Transfer (BOT) agreement to operate a terminal in the Port of Colombo, with the Government of Sri Lanka holding the majority stake at 85%, while the government retains a 15% share. According to a source in the Ministry of Finance, ‘This surprising investment by a US government entity raises questions about its true nature, despite the optimistic image it seeks to convey. Notably, this investment comes after several visits by Victoria Nuland, a prominent figure, to the island nation a few months ago.’
However, a statement issued by the US Embassy states, “The new terminal underscores DFC’s dedication to financing top-tier infrastructure that aligns with the development needs of its partners, supports local communities, and respects the local financial conditions. This investment further underscores the enduring commitment of the United States to Sri Lanka’s economic growth and its regional economic integration, including its ties with India.”
DFC Chief Executive Officer (CEO) Scott Nathan traveled 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. The terminal is currently constructing the next Chinese-run container terminal, Colombo International Container Terminal (CICT).
According to the press release issued by the U.S. embassy in Colombo, “Foreign Minister Ali Sabry, Chief of Staff to the President and National Security Advisor (NSA) Sagala Ratnayaka, and U.S. Ambassador to Sri Lanka Julie Chung joined CEO Nathan for the ceremonial launch of the new terminal.”
“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.”
Meanwhile, 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.”
According to the statement, “this investment showcases 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, signaling 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.”