Adani Ports To Fund Sri Lankan Port Project Using Own Resources; Withdraws US Funding

Billionaire Gautam Adani’s conglomerate announced on Tuesday that Adani Ports will fund its Sri Lankan port project using its own resources, opting out of seeking US funding.

Adani Ports and SEZ Ltd confirmed in an exchange filing that the Colombo West International Terminal (CWIT) project is on track for commissioning by early next year. The company stated that it will use “internal accruals” to finance the ongoing project, aligning with its capital management strategy.

The company also revealed that it has withdrawn its request for financing from the US International Development Finance Corporation (DFC), which had previously agreed to provide a USD 553 million loan for the terminal’s development.

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The CWIT is being developed through a partnership between Adani Ports, Sri Lankan conglomerate John Keells Holdings, and the Sri Lanka Ports Authority (SLPA). The project, located at the Port of Colombo, is critical for enhancing the port’s capacity, which is currently operating at over 90% utilization.

The DFC’s financing was part of the US government’s efforts to counter China’s influence in the region. However, the loan process faced delays after the DFC demanded changes to the agreement between Adani and the SLPA, which then went under review by Sri Lanka’s Attorney General.

As the project nears completion, Adani Ports, which holds a 51% stake in the venture, decided to proceed without the DFC’s financial support. The DFC had not disbursed any funds to Adani Ports, and the agency is still “assessing the ramifications” of bribery allegations against Adani group executives.

The US Department of Justice recently charged Adani Group chairman Gautam Adani and others over allegations of paying USD 265 million in bribes to secure solar power contracts. Adani Group has denied the charges and promised to pursue legal action.

The Port of Colombo, the busiest transshipment port in the Indian Ocean, has been operating at full capacity since 2021, signaling a need for expanded infrastructure. Phase 1 of the CWIT project is expected to be operational by Q1 2025.

The new terminal, which will serve growing economies in the Bay of Bengal, will handle Ultra Large Container Vessels (ULCVs) with capacities of up to 24,000 TEUs. The terminal will have an annual handling capacity of over 3.2 million TEUs.

Adani Ports, with cash reserves of approximately USD 1.1 billion as of September 30, 2024, reported an operating profit of USD 2.3 billion over the past 12 months.