Sri Lanka (Commonwealth) _ As New Delhi and Washington seek to limit China’s influence in South Asia, the US will finance a $553 million port facility being planned by Indian billionaire Gautam Adani in Colombo, the commercial and industrial city of Sri Lanka.
The largest infrastructure investment made by the US government agency in Asia and one of its largest worldwide is the finance provided by International Development Finance Corp. for the deep water West Container Terminal in Colombo. As per a statement from DFC, this would support Sri Lanka’s economic development and its regional economic integration with other countries in particular India, the key partner to both countries.
In addition, the US financing suggests that attempts to lessen Beijing’s influence over Sri Lanka have 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 on the hand attempts to make a shift with the regional power dynamics as well.
The money is a part of the $9.3 billion worldwide acceleration of DFC investments in 2023. According to a US official, the financing of the port in Sri Lanka will illustrate much needed US’s intention to get significantly involved in development drives throughout the Indo-Pacific region.
As at the end of the previous year, China, the island nation’s largest foreign direct investor, had invested around $2.2 billion. US diplomatic representatives fiercely criticized the processes around the little-used southern Hambantota port in Sri Lanka, viewing it as unsustainable and a component of China’s “debt-trap diplomacy.”
According to DFC, they would work with sponsors Adani Ports & Special Economic Zone Ltd. and John Keells Holdings Plc.
One of the busiest ports in the Indian Ocean is the port of Columbo, which is situated near international shipping routes. More than half of all cargo ships pass through its waterways. The DFC claimed that even though it has been operating at above 90% utilization for the previous two years, it still needs more capacity.
The money from the US might be interpreted as supporting both the contentious port project in which the Adani Group has a controlling share and the company, which has been badly hit by short sellers. The corporation, which has always denied any wrongdoing, has been battling a litany of corporate fraud accusations brought up by Hindenburg Research and many media probes.
Also read:
WHAT HAPPENED TO ADANI’S PORTS SHARES…
ADANI TO INVEST IN GREEN HYDROGEN PROJECTS
ADANI TO INVEST $1.5 BN TO MODERNIZE ASIA’S BIGGEST SLUM
ADANI PORTS SET RECORDS FOR R… TR…..IC!
SRI LANKA NODS TO ADANI GROUP’S $442 MILLION WIND POWER PROJECT
Last year, a few local MPs criticized its port and energy projects in Sri Lanka, saying they were opaque and directly related to New Delhi’s goals. The Indian millionaire denied these allegations, saying that Sri Lanka was provided for by the investments. The billionaire has long supported Narendra Modi, the prime minister of India, who has openly chastised China. The US official would to comment further on the nature of the claims, only stating that DFC chose projects after doing thorough due diligence.
The Development Finance Corporation (DFC) was established by the Trump administration to help developing nations and promote US foreign policy goals. Establishing global efforts was first challenging due of the Covid-19 pandemic.
However, according to a recent assessment from the AidData institute at William & Mary in Virginia, funding has increased recently and the organization has assisted Washington in closing the development expenditure gap with China’s far more well-known Belt and Road Initiative.
According to DFC CEO Scott Nathan, the organization’s support would “create greater prosperity for Sri Lanka – without adding to sovereign debt – while at the same time strengthening the position of our allies across the region.”
This is the first time that an Adani project is being funded by the US government, via one of its agencies, thus endorsing the Adani Group. It demonstrates their faith in the Group’s capacity to make investments and develop a top-notch container facility at Colombo Port. Karan Adani stated, “We see this as a reaffirmation of our vision, our capabilities, and our governance by the international community.”
With half of all container ships passing through its waterways, Sri Lanka is one of the major transit hubs in the globe, according to Scott Nathan, CEO of the US financing agency. In addition to boosting Sri Lanka’s economy and preventing the country from becoming more indebted, DFC’s pledge of $553 million in private sector financing for the West Container Terminal would also fortify our friends’ positions throughout the region.
The Colombo West International Terminal (CWIT) will be developed by the Adani-led consortium under a 35-year construct, operate, and transfer (BOT) agreement.
