US Commits Over 500 Million Financing for Adani Terminal Venture at Colombo Port

The US International Development Finance Corporation (DFC) said on Wednesday it will provide USD 553 million in financing for a Colombo port terminal project, partly owned by India’s Adani Group.

“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,” U.S. Ambassador to Sri Lanka Julie Chung said in a statement.

Sri Lanka is slowly recovering from its worst financial crisis after its foreign exchange reserves ran to record lows last year forcing its economy to contract by 7.8% in 2022. Ports-to-edible oils Adani group, controlled by Indian billionaire Gautam Adani, holds a 51% stake in the west container terminal of the port, which also has a terminal run by China Merchants Port Holdings Co Ltd, according to Reuters.

In just four years, DFC said its investment has gone from under $20 million to almost $1 billion dollars invested across Sri Lanka. “DFC’s commitment of $553 million in private sector loans for the West Container Terminal (WCT) will expand its shipping capacity, creating greater prosperity for Sri Lanka – without adding to sovereign debt – while at the same strengthening the position of our allies across the region,” DFC CEO Scott Nathan said in a statement.

India extended about USD 4 billion in swaps and credit lines to Sri Lanka last year, providing critical support to import fuel, medicine and fertiliser during the worst of the crisis. The agency report said Sri Lankan conglomerate John Keells Holdings owns 34 percent of the WCT and the rest is held by the state-run Sri Lanka Ports Authority (SLPA). It added that dredging for the terminal kicked off last November with the first stage to be completed in the third quarter of 2024 and the full project to be finished by the end of 2025.

(With agency inputs)