From ports to power: Sri Lanka's 20-year journey in foreign investment (2004-2024)

From 2004 to 2024, Sri Lanka's FDI journey has been a mix of bold ambition, uneven execution, and political shifts

- By Jayantha Gonsalkorale

WHEN Sri Lanka opened its economy in 1977, the vision was to turn a small island into a nimble hub for global trade. But it’s in the past two decades that the country’s foreign investment story has been most dramatic — and, at times, most controversial.

From the cranes of Colombo to the wind farms of the North, each chapter since 2004 has been marked by big bets, bold champions, and sometimes bitter debates over the price of ambition.

The logistics era: capacity, competition, and controversy

The early 2010s marked Colombo’s leap into the big-ship era. The Colombo International Container Terminals (CICT) — a joint venture between China Merchants Port Holdings and the Sri Lanka Ports Authority (SLPA) — opened in 2013 under a 35-year build-operate-transfer deal. It gave Colombo South Harbour the capacity to handle the world’s largest vessels, cementing the port’s status as South Asia’s top transshipment hub.

Further south, Hambantota Port became the most talked-about infrastructure deal in the nation’s modern history. Conceived under President Mahinda Rajapaksa as a second deep-water port, it struggled to attract traffic. In 2017, amid mounting debt, the unity government led by Ranil Wickremesinghe leased it to China Merchants Port for $ 1.12 billion on a 99-year term. Which perhaps was not a sensible move considering the length of the lease and the extent of land that was incorporated in the lease. For some, it was a lifeline; for others, a warning about debt and sovereignty.

Another key concession was the Colombo West International Terminal (WCT) agreement signed in 2021 — majority owned by India’s Adani Ports & SEZalongside John Keells Holdings and SLPA. This marked the first Indian-led port development in Sri Lanka, signalling a diversification of strategic partners.

Real estate and tourism: concrete signals of confidence