The Adani Group of India has a portion of the Colombo port terminal project in which the US International Development Finance Corporation (DFC) has announced an investment of USD 553 million.
DFC’s sizeable investment aims to sustain the West Container Terminal at the Port of Columbo’s long-term growth.
DFC’s investment is strategically significant because it is projected to drive private sector-led growth in Sri Lanka.
The timing of this financial infusion is crucial for Sri Lanka, which has been experiencing its worst economic crisis.
As a result, its declining foreign exchange reserves will cause its economy to contract by 7.8% in 2022.
The West Container Terminal, a part of the Port of Colombo, is jointly owned by the Adani Group, holding a 51 per cent share.
The United States’ commitment to the welfare and advancement of the Sri Lankan people is demonstrated by the DFC’s involvement.
In just four years, DFC’s investment in Sri Lanka grew from less than $20 million to almost $1 billion, illustrating the remarkable growth of the company’s presence in the nation.
This most recent $553 million investment will boost Sri Lanka’s financial status by increasing the West Container Terminal’s shipping capacity.
The Port of Colombo has been operating at over 90% utilisation since 2021, indicating the urgent need for additional capacity.
The West Container Terminal project is expected to enhance this capacity. The new terminal takes advantage of Sri Lanka’s valuable location along essential shipping routes to serve the expanding economies in the Bay of Bengal.
During the height of the crisis last year, India provided vital support for imports of fuel, medication, and fertiliser to Sri Lanka by offering about $4 billion in swaps and credit lines.
Dredging for this project started in November, and its completion is scheduled to be finished by the end of 2025. The first phase will likely be completed by the third quarter of 2024.
References- gazettengr, news18
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