US Injects Half-Billion Dollars in Colombo Transhipment Container Port
On 8 November 2023, the US International Development Finance Corporation (DFC) announced that it shall finance the development of a transhipment container terminal at the Port of Colombo, Sri Lanka, to the tune of USD 553 million.
“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. 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.”
DFC CEO Scott Nathan
The project is a partnership by Sri Lanka Ports Authority, Jon Keells Holdings and Adani Group. Adani Ports, a subsidiary of Adani Group, owns a controlling stake of 51% in the venture.
Lying along one of the critical maritime trade routes connecting Asia with Middle-East and Europe, the Port of Colombo has evolved into one of the largest and busiest transhipment ports in the Indian Ocean. In the middle of the COVID pandemic in 2021, the Port of Colombo was already operating at 90% capacity, signaling an urgent need for expansion.
“The $553 million investment by DFC for the long-term development of the Port of Colombo’s West Container Terminal (CWCT) 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 #IndoPacific.”
US Ambassador to Sri Lanka Julie Chung
The quay will have a length of 1,400 meters and a dept of 20 meters, thus allowing the largest ultra-large container vessels with a capacity of 24,000 TEU to berth. Completion is expected by end of 2024 when the CWCT will be able to handle 3.2 million TEU annually.
“The partnership on the Colombo West Container Terminal project reflects growing strategic trust between India and the United States to co-operate to offer alternatives to China’s Belt and Road Initiative (#BRI).”
Center for Social and Economic Progress Analyst Constatino Xavier