by Our Correspondent in Colombo
The United States has pledged a $17 million grant to help modernise digital systems at Sri Lanka’s Port of Colombo, signalling renewed bilateral cooperation on trade infrastructure as the strategically important harbour expands its capacity amid intensifying regional competition.
US Ambassador Eric Meyer announced the proposed assistance during a visit to the port on Friday, where he met senior management of the Sri Lanka Ports Authority (SLPA), including its chairman, Dr. Mahinda Parakrama Dissanayake, according to information provided by the authority.
The meeting was attended by Anura Karunathilaka, minister of ports and civil aviation and energy, and W.W.S. Mangala, secretary to the Ministry of Ports and Civil Aviation.
The proposed grant is intended to support improvements to Sri Lanka’s Maritime Single Window and Port Community System, digital platforms designed to facilitate information exchange among port authorities, customs officials, shipping companies and other participants in international trade.
The initiative comes as Colombo seeks to accommodate rising container volumes and improve the efficiency of its operations, which are critical to Sri Lanka’s role as a transshipment centre connecting shipping routes between Asia, the Middle East, Africa and Europe.
The SLPA said the port handled a record 8.29 million twenty-foot equivalent units (TEUs) of containers in 2025, compared with approximately 7.79 million TEUs in 2024. The increase underscores the pressure to expand capacity while improving coordination and the reliability of port services.
The proposed digital investment could help streamline documentation, reduce administrative bottlenecks and improve the predictability of cargo movements. However, details of the grant agreement, its implementation timetable and the allocation of funds were not immediately available.
The announcement also comes against the backdrop of an earlier US financing initiative involving the Colombo West International Terminal, a deepwater container terminal developed by a consortium including India’s Adani Ports and Special Economic Zone, Sri Lankan conglomerate John Keells Holdings and the state-owned SLPA.
In November 2023, the US International Development Finance Corporation (DFC) announced plans to provide $553 million in financing for the project, which Washington viewed as an investment in critical infrastructure in the strategically important Indian Ocean region.
The financing process subsequently stalled before any funds were disbursed. In November 2024, US authorities indicted Adani Group chairman Gautam Adani and others over alleged bribery and securities fraud involving solar energy contracts in India. Adani and the group denied the allegations and said they would pursue legal remedies.
In December 2024, Adani Ports announced that it had withdrawn its request for DFC financing and would fund the Colombo terminal through internal resources and a capital management plan. The company did not explicitly attribute its decision to the US legal case, although the withdrawal followed the indictment and heightened scrutiny of the group.
The distinction is significant: the $553 million loan was not disbursed, and Adani Ports withdrew its financing request. It would therefore be inaccurate to describe the episode simply as Washington withdrawing money already provided to the project.
The new $17 million grant proposal concerns a different purpose: digital infrastructure rather than the construction of a privately operated container terminal. Its announcement nevertheless places US engagement with Colombo’s port infrastructure back in focus.
The broader context of US engagement was reinforced by a September visit to Sri Lanka by a delegation led by Laura DiBella, chairperson of the US Federal Maritime Commission (FMC), and Commissioner Robert J. Harvey.
The delegation visited the Port of Colombo on September 9, meeting the SLPA chairman and senior management to discuss port operations, services, capacity development and ongoing and future development initiatives. The discussions also addressed international shipping, the evolving role of regional ports, maritime connectivity and the resilience of global supply chains, according to the SLPA.
DiBella also delivered the keynote address at the Colombo International Maritime and Logistics Conference, while Harvey participated in a panel discussion on maritime regulation and supply-chain resilience. The delegation toured key port facilities, including the South Asia Gateway Terminal and the West Container Terminal, and met government officials and representatives of the maritime and logistics industries.
In her remarks, DiBella emphasised the importance of competition, a robust regulatory framework and a transparent investment environment in attracting foreign capital and supporting long-term maritime growth. Harvey highlighted the importance of resilient supply chains and the role of effective maritime regulation in maintaining reliable international trade networks.
Washington has previously linked port development and maritime cooperation in Sri Lanka to broader economic and strategic priorities. In February 2024, then-US Deputy Secretary of State for Management and Resources Richard Verma visited Colombo and toured the planned West Container Terminal, highlighting the proposed US financing as part of support for Sri Lanka’s economic recovery and its ambition to develop as a regional shipping hub.
The port’s expansion is also taking place in a region where India and China have significant commercial and strategic interests. Colombo’s location near major east-west shipping lanes makes it an important transshipment centre, while foreign investment in terminals and logistics infrastructure has become an important element of competition for influence across the Indian Ocean.
For Sri Lanka, improved digital coordination could complement investments in physical infrastructure by helping the port process growing volumes more efficiently. The effectiveness of the proposed assistance will depend on its implementation, integration across government agencies and adoption by port operators and shipping businesses.
The latest announcement signals an opportunity to deepen US-Sri Lankan economic cooperation, but the grant’s practical impact will ultimately depend on whether the promised modernisation translates into measurable improvements in port efficiency, transparency and trade facilitation.
