US invests $553 Million in Adani Port in Sri Lanka to stop China’s influence. The United States has committed a substantial investment of $553 million toward the development of a port terminal in Colombo, Sri Lanka, in a strategic move to counterbalance China’s influence in the region.
This funding, facilitated by the International Development Finance Corp (DFC), signals a concerted effort by both the US and India to bolster Sri Lanka’s infrastructure and economic prospects while curbing China’s sway in South Asia.
The financial support is designated for the West Container Terminal and represents not only a major initiative by the US but also a significant endorsement for billionaire Gautam Adani’s conglomerate, which faced allegations of fraud earlier in the year resulting in a market value decline.
With this backing, the US aims not only to strengthen Sri Lanka’s economic growth but also to foster regional economic integration, particularly with India, a key ally in the endeavor to diminish China’s influence in the area.
This investment marks a broader surge in DFC’s involvement, totaling $9.3 billion in investments throughout 2023.
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It reflects a pronounced shift in US strategy, focusing on development projects across the Indo-Pacific, particularly countering China’s growing influence in the region.
The decision to fund Sri Lanka’s port development aligns with US officials’ criticism of what they term “debt-trap diplomacy” practiced by China, referring to unsustainable projects such as the Hambantota port.
The DFC is partnering with local entities, John Keells Holdings Plc and Adani Ports & Special Economic Zone Ltd., leveraging their expertise and high-quality standards to ensure the success and credibility of the project.
The Colombo port, strategically located in the Indian Ocean, stands as a vital hub for international shipping routes, operating at over 90% capacity for the past two years and in need of expansion to meet increasing demands.
The goal of this investment extends beyond Sri Lanka’s prosperity; it aligns with US foreign policy objectives in the region.
Despite initial challenges faced by the DFC due to the COVID-19 pandemic, the agency has surged in funding efforts and is narrowing the gap in development spending when compared to China’s Belt and Road Initiative.
As US invests $553 Million in Adani Port in Sri Lanka to stop China’s influence, DFC’s Chief Executive Officer, Scott Nathan, underscored the significance of this investment, emphasizing its role in enhancing Sri Lanka’s prosperity without burdening its sovereign debt while simultaneously fortifying alliances and partnerships across the region.
