The United States International Development Finance Corporation (DFC) has revealed a substantial investment of $553 million in Adani Ports’ container terminal project located in the Port of Colombo, Sri Lanka. This significant financial commitment aims to boost private-sector investments that support economic development and strategic partnerships in the region.
US Financial Involvement
The DFC, led by Chief Executive Officer Scott Nathan, shared its intention to contribute $553 million to the project. This move demonstrates the United States’ commitment to enhancing economic growth and development in the region, positioning Sri Lanka strategically along major shipping routes to serve the growing economies.
The Colombo West International Terminal
Adani Ports initiated this project in collaboration with the Sri Lanka Ports Authority (SLPA) and John Keells Holdings. The consortium, named Colombo West International Terminal Pvt. Ltd., has adopted a Build-Operate-Transfer model with a 35-year duration, where Adani Ports holds a majority stake of 51%.
Background and Political Shifts
The decision to invest in the Colombo West International Terminal comes following political shifts and project adjustments. Former President Gotabaya Rajapaksa’s administration ousted the governments of India and Japan from the East Container Terminal project, citing the West terminal as a compromise solution. Adani Ports was brought in as New Delhi’s representative in this project.
Addressing Corruption Allegations
Adani Group has faced allegations of corruption in 2023, with reports from Hindenburg in January and the Organized Crime and Corruption Reporting Project in August. However, DFC CEO Scott Nathan downplayed these allegations, stating that Adani Ports’ subsidiary was not implicated in any of the accusations. He emphasized the commitment of the United States and DFC to maintain high standards of transparency and due diligence when selecting partners.
The involvement of the DFC in this Indian conglomerate-led port project in Sri Lanka holds significance, especially in the context of China’s expanding presence in the region. China Merchants Group has recently announced plans to construct a logistics complex at the Colombo Port, with an estimated cost of $392 million. This development occurs amidst ongoing concerns raised by both India and the United States about Chinese research vessels visiting Sri Lanka’s ports.