India, Japan and Sri Lanka are weighing the development of a terminal at the bustling port of Colombo in a country that’s seen ongoing political controversies related to investments from China’s Belt and Road initiative.
The three countries are set to sign a memorandum of understanding in the coming months to build out the east container terminal at the Port of Colombo, according to an Indian government official who asked not to be identified, citing rules.
India and Japan will seek private sector investment and a terminal operator after the framework agreement is signed, with India likely providing easy credit, the Indian official said. Sri Lanka will control 51% of the project with India and Japan jointly controlling the other 49%, this person said. Unlike the Chinese-owned Hambantota port in southern Sri Lanka — which has been heavily criticized — the Colombo port project is a commercially viable venture, though it should not be viewed as a counter to China’s Belt and Road, they said.
Japan would provide a 40-year Yen loan with a 10-year grace period, with Sri Lanka holding 51% and Japan and India jointly holding 49%.