- Thursday, December 26, 2024
The American assistance could also restore credibility for Gautam Adani, mitigating the impact of fraud allegations by US short seller Hindenburg Research.
By: Shubham Ghosh
THE United States will give $553 million (£451 million) in financing a port terminal in Colombo in Sri Lanka being developed by Indian business tycoon Gautam Adani as New Delhi and Washington DC aim to check China’s influence in the South Asia region.
According to a Bloomberg report, the International Development Finance Corp’s (DFC) funding highlights joint US-Indian endeavours to diminish Beijing’s influence in Sri Lanka, as Colombo grapples with economic distress after borrowing heavily for Chinese port and project highways.
The American assistance could also restore credibility for Adani, mitigating the impact of fraud allegations by US short seller Hindenburg Research, which marked a massive market devaluation for the Indian conglomerate.
The deepwater West Container Terminal in the Sri Lankan capital is Washington’s biggest infrastructure investment in Asia and among its largest globally. According to the DFC, it will boost Sri Lanka’s economic growth and “its regional economic integration, including with India, a key partner to both countries”, the Bloomberg report added.
This funding represents a portion of the worldwide rise in DFC investments, which amounted to $9.3 billion (£7.5 billion) in the current year. A US official characterised the support for the Sri Lanka port as a symbol of Washington’s dedication to increased involvement in development initiatives throughout the Indo-Pacific region.
Beijing had invested about $2.2 billion (£1.62 billion) in the South Asian island-nation as of 2022 end, becoming its largest foreign direct investor. American representatives have openly criticised Sri Lanka’s little-used southern Hambantota port as unsustainable and part of what it calls the Asian giant’s “debt-trap diplomacy”.
According to DFC, it will work with sponsors such as John Keells Holdings Plc and Adani Ports & Special Economic Zone Ltd., banking on their “local experience and high-quality standards”, the Bloomberg report added.
Colombo’s port, strategically located along major international shipping routes, ranks among the busiest in the Indian Ocean, with almost half of all container vessels navigating its waters. The DFC has reported over 90 per cent utilisation for two years and a pressing need for additional capacity.
The US funding may function as an endorsement for the beleaguered Indian conglomerate headed by Adani, once the world’s second richest person, and the controversial port project in which it holds a majority stake.
