Billionaire Gautam Adani’s conglomerate Adani Group has decided to self-fund its Sri Lankan port project, opting out of US financing. Adani Ports and SEZ Ltd announced in a late Tuesday regulatory filing that, “with reference to the captioned subject-matter, we would like to inform that CWIT project in Sri Lanka is progressing well and is on track for commissioning by early next year.” “The project will be financed through the company’s internal accruals and capital management plan. We have withdrawn our request for financing from the DFC,” the company further said.
Meanwhile, the US International Development Finance Corp agreed to lend $553 million to help build a new container terminal called, Colombo West International Terminal (CWIT) at the Port of Colombo in Sri Lanka.
The CWIT is a joint project between Adani Ports, John Keells Holdings, and the Sri Lanka Ports Authority. Notably, the DFC’s financing was aimed at countering China’s influence in the region and was a vote of confidence in Adani’s infrastructure development capabilities. However, the loan process for Adani’s Colombo port project hit a roadblock when the DFC requested changes to the agreement between Adani and the Sri Lanka Ports Authority (SLPA) to meet their conditions.
With the project almost complete, Adani Ports, which holds 51% of the venture, decided to finish it without the US funding. The US agency had recently said that it was “actively assessing the ramifications” of the bribery allegations against the Adani group executives. The US agency had not released any funds to the conglomerate yet. Notably, Adani Group has recently denied all charges of bribery of the US Department of Justice, terming them “baseless”.
Adani Group: Port of Colombo
The Port of Colombo, a major hub in the Indian Ocean, has been operating at more than 90% capacity since 2021, highlighting the need for expansion. The port project in Sri Lanka is also a strategic move by the US to balance China’s influence in the country.
The developers expect to operationalize the first phase of the project by early 2025. The new terminal will serve growing economies in the Bay of Bengal region, leveraging Sri Lanka’s strategic location on key shipping routes. In 2021, Adani Ports partnered with Sri Lanka Ports Authority and John Keells Holdings to invest over $700 million in expanding Colombo Port through the CWIT project.
