The US International Development Finance Corporation (DFC) will provide $553 million in financing for developing a container terminal in Sri Lanka operated by Indian billionaire Gautam Adani-led Adani Group. This move comes as part of broader efforts by the United States to counter China’s influence in South Asia.

The DFC’s financing for the deepwater West Container Terminal in Colombo is the agency’s largest infrastructure investment in Asia and one of its biggest globally. It aims to bolster Sri Lanka’s economic growth and regional economic integration, particularly with India.

The private sector loan to the Adani-led terminal consortium will expand its shipping capacity, contributing to Sri Lanka’s prosperity without adding to its sovereign debt. It also strengthens the position of US allies in the region.

Sri Lanka has received significant Chinese investment in port and highway projects, which left the country heavily indebted to Beijing. This move by the US signifies an effort to reduce China’s influence in Sri Lanka and balance the power dynamics in the region.

The DFC, established under the Trump administration, has accelerated its funding in recent years to compete with China’s Belt and Road Initiative. This development reflects the growing strategic trust between India and the United States to provide alternatives to China’s infrastructure projects in the region.

The United States’ engagement in development projects across the Indo-Pacific region, particularly in Sri Lanka, underscores its commitment to countering China’s influence.