9 November 2023 01:06 am Views - 337
U.S. International Development Finance Corporation (DFC) yesterday said it would lend US $ 553 million to develop Colombo West International Terminal (Pvt.) Ltd (CWT), a deep-water shipping container terminal in the Port
of Colombo.
India’s largest port operator Adani Ports and SEZ holds 51 percent of CWT, which it is developing with Sri Lanka’s premier blue chip John Keells Holdings PLC (JKH) and state-run Sri Lanka Ports Authority (SLPA). JKH has a 34 percent stake in
CWT and the rest is held by the SLPA.
DFC, the U.S. government’s development finance institution, collaborates with the private sector to fund innovative solutions for the most pressing challenges in the developing world. It provides investments across a range of sectors such as energy, healthcare, infrastructure, agriculture, small businesses and financial services.
“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 US $ 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 said.
In a statement released by the Adani group, it was noted that this marks the first instance of a U.S. government agency providing funding for an Adani project.
DFC held a ceremony in Colombo to mark the milestone event, which was attended by Nathan, Adani Ports and SEZ Whole Time Director and CEO Karan Adani, John Keells Holdings Chairman Krishan Balendra, US Ambassador in Colombo Julie Chung and other dignitaries.
“We welcome the association of U.S. International Development Finance Corporation, the U.S. government’s development finance institution, in funding the Adani project and we see this as a reaffirmation by the international community of our vision, our capabilities and our governance,” said Karan Adani.
The Port of Colombo, situated in the heart of the Indian Ocean, stands as the largest and most active transshipment port in the region. Since 2021, it has consistently operated at over 90 percent capacity, highlighting the demand for increased capabilities.
The introduction of the new terminal is poised to address the needs of the burgeoning economies in the Bay of Bengal, capitalising on Sri Lanka’s strategic location along the major shipping routes and its proximity to these rapidly expanding markets.
“DFC’s investment is an endorsement of the potential of the West Terminal project and a boost for investor confidence as Sri Lanka’s economy recovers,” said Balendra.
The Port of Colombo houses only one other deep-water container terminal, the Chinese-controlled Colombo International Container Terminal (CICT).
“The US $ 553 million investment by DFC for the long-term development of the Port of Colombo’s West Container Terminal will facilitate private sector-led growth in Sri Lanka and attract crucial foreign exchange inflows during its economic recovery. Sri Lanka regaining its economic footing will further our shared vision for a free and prosperous Indo-Pacific,” said Chung.
A delegation from U.S. International Development Finance Corporation (DFC), led by DFC Chief Executive Officer Scott Nathan, visited the John Keells group head office on Tuesday, to meet with the leadership teams of John Keells Holdings PLC (JKH) and the Adani group.
DFC, which works to drive private sector investments that advance development and economic growth,
while strengthening the strategic positions of its partners, has committed US $ 553 million in financing to the Colombo West International Terminal (CWIT) within the Port of Colombo.
The CWIT is a consortium comprising India’s largest port operator Adani Ports and SEZ Ltd, Sri Lanka’s largest listed conglomerate JKH and the Sri Lanka Ports Authority. The consortium is set to develop the CWIT on a build, operate and transfer agreement, for a period of 35 years.