Adani Ports to fund Sri Lankan terminal project without US loan

Adani Ports, part of billionaire Gautam Adani’s group, announced on Tuesday (December 10, 2024) that it will fund its Sri Lankan port project using its own resources and will not seek US funding.

In a filing, the company stated that the project is on track to begin operations by early 2025 and will be financed through internal funds, in line with its capital management strategy.

Adani Ports also confirmed it had withdrawn its request for financing from the US International Development Finance Corporation (DFC). In November 2023, DFC had agreed to provide a $553 million loan for the development of the Colombo West International Terminal (CWIT) at the Port of Colombo in Sri Lanka.

The CWIT project is a partnership between Adani Ports, Sri Lankan company John Keells Holdings and the Sri Lanka Ports Authority (SLPA).

The US loan was part of a larger effort to reduce China’s influence in the region, but the process stalled when DFC requested changes to the agreement between Adani and SLPA, which then went under review by Sri Lanka’s Attorney General.

With the project nearing completion, Adani Ports, which holds 51% of the venture, chose to proceed without the US funding.

Recently, the DFC had also raised concerns about bribery allegations involving Adani group executives, although no funds have been disbursed to the company. Adani has denied these allegations and is taking legal action.

The Port of Colombo is the busiest transhipment port in the Indian Ocean, operating at over 90% capacity since 2021.

The CWIT project, initiated in September 2021, aims to expand the port’s capacity. Phase 1 of the project is set to be operational by the first quarter of 2025.

The CWIT will be Sri Lanka’s largest and deepest container terminal, with a quay length of 1,400 meters and a depth of 20 meters.

It will handle Ultra Large Container Vessels (ULCVs) with capacities of up to 24,000 TEUs and is expected to have an annual capacity of over 3.2 million TEUs.

As of September 30, 2024, Adani Ports had $1.1 billion in cash reserves and generated an operating profit of $2.3 billion over the last 12 months.