US steps in to boost Sri Lanka’s shipping hub status in South Asia
By: Staff Writer
Colombo (LNW): US International Development Finance Corporation extends 20 year financing worth $ 553 m to India’s Adani, SL’s JKH and SLPA owned Colombo West International Terminal costing $ 750 m.
DFC CEO Scott Nathan says funding will expand SL’s shipping capacity, creating greater prosperity without adding to sovereign debt whilst strengthening the position of its allies across the region.
Ambassador Julie Chung says support symbolic of US’ long-standing commitment to SL as its regain economic footing to further shared vision for a free and prosperous Indo-Pacific.
Govt. big wigs Foreign Minister Ali Sabry, National Security Advisor Sagala Ratnayake and Indian envoy witness loan agreement signing ceremony.
Deal signifies US, Sri Lanka and India fostering enduring legacy of cooperation in the development of sustainable infrastructure, like smart and green ports.
Colombo is the largest and busiest transhipment port in Indian Ocean and Sri Lanka one of the world’s key transit hubs with half of all container ships transiting through its waters.
Adani Ports CEO Karan Adani says DFC support is reaffirmation by the international community of Group’s vision, capabilities and governance.
Says deal will facilitate private sector-led growth and attract crucial foreign exchange to Sri Lanka to aid in its economic recovery.
JKH Chairperson Krishan Balendra says DFC investment an endorsement of potential of the CWIT project and a boost for investor confidence on SL.
Analysts term 20 year tenor of financing for entirety of debt component of project is attractive amidst SL’s default-Sovereign status and low credit rating.
The United States yesterday signified its biggest boost for Sri Lanka’s hub status for shipping in the Indian ocean with its International Development Finance Corporation (DFC) committing a 20 year financing worth $ 553 million to the upcoming Colombo West International Terminal (CWIT).
This is a joint venture involving Indian giant Adani, Sri Lanka’s top blue chip John Keells Holdings and the Sri Lanka Ports Authority.
Analysts said that given the 20 year tenor, the financing for the entirety of the debt component of CWIT is favourable.
It also comes at a time when Sri Lanka remains a default-Sovereign and low grade credit rating. The CWIT costs $ 750 million and the balance is funded by equity.
DFC said its commitment of over half a billion US Dollars to support the development of a deep-water shipping container terminal in the Port of Colombo, will provide critical infrastructure for the South Asian region.
The new terminal reflects DFC’s commitment to financing high-quality infrastructure that supports its partner’s development needs, invests in local communities, and is respectful of local financial conditions.
The investment further demonstrates the US enduring commitment to Sri Lanka’s economic growth and its regional economic integration, including with India.
When commissioned, CWIT will be the largest and deepest container terminal in Sri Lanka. With a quay length of 1,400 m and an alongside-depth of 20 m, CWIT will be equipped to handle ultra large container vessels with capacities of 24,000 TEUs.
The new terminal’s annual cargo handling capacity is likely to exceed 3.2 million TEUs. Last year the Colombo Port handled nearly 8 million TEUs.