Sri Lanka Opens $15B Port City to Full Foreign Ownership

A 269-hectare artificial island emerges from Colombo's bay, its skeletal towers reaching toward the sky. This is Port City Colombo—Sri Lanka's $15 billion bet on becoming South Asia's financial hub. And now, in a dramatic pivot from its Chinese origins, the island nation is rolling out the red carpet for any investor willing to write a check.

From Belt and Road to Global Free-for-All

Port City Colombo began life as a flagship project of China's Belt and Road Initiative. China Communications Construction Company led the charge, envisioning a gleaming financial district that would cement Sri Lanka's role in Beijing's grand strategy.

But 2022 changed everything. Sri Lanka's economic meltdown—complete with fuel shortages, rolling blackouts, and sovereign default—forced a brutal recalculation. The government realized that Chinese capital alone couldn't finish what it started. So it did something unexpected: it opened the doors to everyone.

The Desperation Premium

Sri Lanka's new pitch is audacious by regional standards. 100% foreign ownership. Massive tax breaks. No local partner requirements. It's a stark contrast to neighbors like India and Indonesia, where foreign investors face ownership caps and bureaucratic mazes.

This isn't generosity—it's survival economics. With external debt at 83% of GDP, Sri Lanka needs Port City to succeed. The government projects 1.3 million jobs and $13 billion in annual economic impact once complete. Without it, the country's path to recovery remains unclear.

The Geopolitical Tightrope

But there's a catch—actually, several. India watches nervously as Chinese influence potentially expands in its backyard. Western investors remain wary of joining a Chinese-led project, especially as US-China tensions simmer. Meanwhile, Beijing has already sunk $1.4 billion into the venture and won't simply walk away.

Sri Lanka finds itself performing a delicate balancing act. It wants to reduce Chinese dependency but can't afford to alienate its largest creditor. The solution? Transform a bilateral Chinese project into a multilateral investment opportunity—if anyone's brave enough to bite.