Adani backs out of US loan for Sri Lanka project, plans to use own funds

Billionaire Gautam Adani’s Adani Ports and Special Economic Zone Ltd told the exchanges this week that it will pull out of a $553 million loan from the US International Development Finance Corp. (DFC) and will use internal funds to complete the development of the Colombo West International Terminal (CWIT) in Sri Lanka.

According to the filing, the CWIT project, which is being developed by Adani Ports, Sri Lanka Ports Authority (SLPA), and John Keells Holdings Plc, is on track for commissioning by early 2025.

Adani Ports has a 51% stake in the project.

The Colombo Port, which is a critical hub in the Indian Ocean, will have the CWIT as a deep-water container terminal.

Upon completion, the terminal will become Sri Lanka’s largest and deepest, and will have an annual handling capacity of over 3.2 million TEUs.

The DFC’s funding, which is part of broader US efforts to counter Chinese influence in the Indo-Pacific, had faced delays owing to a review of the agreement by Sri Lanka’s attorney general.

DFC had not paid any funds because of ongoing due diligence and the bribery allegations.

The CWIT is strategically important as it is located on main shipping routes, and is designed to support the expanding trade in the Bay of Bengal region.

Construction of the terminal began in September 2021, and is expected to improve Colombo Port’s capacity, which has operated above 90% since 2021.

Despite these challenges, Adani Ports reported strong financials, including $1.1 billion in cash reserves and an operating profit of $2.3 billion over the past year.

This development comes as Adani and Adani Group’s executives face allegations of bribery in US courts.

According to the allegations, $265 million in bribes were paid to secure solar energy contracts in India. The Adani Group has steadfastly denied the allegations.