Adani Group opts out of US funding, withdraws loan request for Colombo port

New Delhi: Billionaire Gautam Adani's conglomerate said Tuesday that it will fund the Sri Lankan port project using its own resources, instead of seeking US funding.

In a filing to the exchange late on Tuesday, Adani Ports and SEZ Ltd announced that the project "is on track for commissioning by early next year." The company also stated that it will finance the ongoing project through "internal accruals," in line with its capital management strategy. The group said it had withdrawn its 2023 "request for financing from the US International Development Finance Corporation (DFC)".

The US International Development Finance Corp, in November 2023, agreed to provide a 553 million dollar loan to support the development, construction, and operation of a deep-water container terminal called the Colombo West International Terminal (CWIT) at the Port of Colombo in Sri Lanka.

A consortium of Adani Ports, Sri Lankan conglomerate John Keells Holdings Plc, and the Sri Lanka Ports Authority (SLPA) is developing the CWIT. DFC financing was part of the US government's broader efforts to counter China's growing influence in the region and was seen as an endorsement of Adani's ability to develop world-class infrastructure.

However, the loan process stalled after the DFC asked that the agreement between Adani and the SLPA be amended to align with their conditions, which then went under review by Sri Lanka's Attorney General. As the project is nearing completion, Adani Ports, which holds 51 per cent of the venture, chose to proceed with the project without funding from the DFC, reported PTI.

The US agency recently stated that it was "actively assessing the ramifications" of the bribery allegations against the Adani group executives. It has not disbursed any money to the ports-to-energy conglomerate so far.

Last month, the US Department of Justice charged the Adani group's founder chairman Gautam Adani, and seven others over allegedly conspiring to pay 265 million dollar in bribes to Indian officials to secure lucrative solar power supply contracts that were expected to yield USD 2 billion in profits over 20 years.

The Colombo West International Terminal (CWIT) project was initiated in September 2021, when Adani Ports signed an agreement with the Sri Lanka Ports Authority and Sri Lankan conglomerate John Keells Holdings, pledging over USD 700 million to expand the capabilities of Colombo Port.