The Adani Group has announced its withdrawal from a financing agreement with a US agency for a port terminal project in Sri Lanka, opting instead to utilize its financial resources.
According to a stock exchange filing released late Tuesday, Adani Ports and Special Economic Zone Ltd (APSEZ) confirmed that the project remains “on schedule for commissioning in early 2025.” The company stated, “The project will be funded through our internal accruals and capital management strategy,” adding that they have “withdrawn our financing application from the International Development Finance Corporation (DFC).”
Previously, in November 2023, the US IDF had committed to providing a USD 553 million loan to support the construction, development, and operation of the Colombo West International Terminal (CWIT), a deep-water container facility at Sri Lanka’s Port of Colombo.
The CWIT project is being executed through a partnership between Adani Ports, local Sri Lankan business giant John Keells Holdings Plc, and the Sri Lanka Ports Authority (SLPA).
The DFC funding was strategically aligned with the US government’s initiatives to counterbalance China’s expanding regional influence and was viewed as a validation of Adani’s infrastructure development capabilities.
The loan process encountered delays when the DFC requested modifications to the agreement between Adani and the SLPA to meet their requirements, which subsequently underwent review by Sri Lanka’s Attorney General.
With the project approaching completion, Adani Ports, which maintains a 51 percent stake in the venture, decided to move forward without DFC funding, according to sources familiar with the matter.
The US agency had previously indicated it was “actively evaluating the implications” of the alleged bribery accusations involving Adani group executives, with no funds having been distributed to the diversified conglomerate. In a recent development, the US Department of Justice filed charges against Gautam Adani, the group’s founder chairman, along with seven other individuals, alleging their involvement in a conspiracy to distribute USD 265 million in bribes to Indian officials. These bribes were reportedly aimed at securing profitable solar power supply agreements projected to generate USD 2 billion in earnings over two decades. The Adani Group has firmly rejected these allegations as unfounded and expressed its intention to pursue all available legal options.
The Port of Colombo stands as the Indian Ocean’s premier and most active transshipment hub. Since 2021, it has been functioning at over 90 percent capacity, highlighting the urgent requirement for expansion. The strategically significant port development in Sri Lanka represents a calculated US initiative to balance China’s growing presence in the island nation. The initial phase of the development is expected to commence commercial operations in the first quarter of 2025. The terminal’s strategic location will serve the expanding economies around the Bay of Bengal, capitalizing on Sri Lanka’s advantageous position along major shipping routes.
The CWIT initiative commenced in September 2021 with Adani Ports entering into a collaborative agreement with the Sri Lanka Ports Authority and John Keells Holdings, committing over USD 700 million to enhance Colombo Port’s capabilities. Upon completion, CWIT will emerge as Sri Lanka’s most extensive and deepest container terminal, featuring a 1,400-meter quay length and 20-meter depth. The facility will accommodate Ultra Large Container Vessels with 24,000 TEUs capacity and is projected to handle over 3.2 million TEUs annually. Financial reports indicate that as of September 30, 2024, Adani Ports maintained approximately USD 1.1 billion (Rs 8,893 crore) in cash reserves and generated an operating profit of USD 2.3 billion (Rs 18,846 crore) over the preceding 12 months.
