Adani Ports and SEZ Ltd. has announced that it will not pursue US funding for the Colombo West International Terminal project in Sri Lanka. Instead, it will use its own resources to finance the project. This decision comes amid allegations involving Adani Group Chairman Gautam Adani, who was recently indicted by US prosecutors in a bribery case.
In a filing on December 10, the Adani-led conglomerate confirmed that the Colombo project is on schedule for commissioning by early next year. The company stated it would finance the project through “internal accruals,” in line with its capital management strategy. Additionally, Adani Ports announced that it has withdrawn its 2023 financing request to the US International Development Finance Corporation (DFC).
In November of the previous year, the DFC had agreed to extend a USD 553 million loan to support the development, construction, and operation of the Colombo West International Terminal, a deep-water container terminal at the Port of Colombo.
The terminal is being developed by a consortium consisting of Adani Ports, Sri Lankan conglomerate John Keells Holdings Plc, and the Sri Lanka Ports Authority (SLPA).
The DFC financing was part of the US government’s strategy to counter China’s expanding influence in the Indian Ocean region and was viewed as a recognition of Adani Ports’ capability to develop world-class infrastructure.
The loan process, however, came to a halt after the DFC requested amendments to the agreement between Adani and the SLPA to meet their conditions, prompting a review by Sri Lanka’s Attorney General. As the project nears completion, Adani Ports, which holds a 51% stake in the venture, has decided to move forward with the development without DFC funding, according to officials familiar with the matter.
The Colombo West International Terminal project was launched in September 2021 when Adani Ports entered into an agreement with the Sri Lanka Ports Authority and Sri Lankan conglomerate John Keells Holdings, committing over USD 700 million to enhance the capacity of Colombo Port. The new terminal aims to serve the growing economies around the Bay of Bengal, leveraging Sri Lanka’s strategic location on key shipping routes and its proximity to these emerging markets. Phase 1 of the project is set to begin commercial operations by Q1 2025.
The Colombo West International Terminal will be Sri Lanka’s largest and deepest container terminal, featuring a quay length of 1,400 metres and a depth of 20 metres. Once completed, the terminal will be capable of accommodating Ultra Large Container Vessels (ULCVs) with capacities of up to 24,000 TEUs. It is expected to handle over 3.2 million TEUs annually.
The Port of Colombo, the largest and busiest transhipment hub in the Indian Ocean, has been operating at over 90 per cent capacity since 2021, highlighting the urgent need for expanded infrastructure to meet growing demand.
Last month, the US Department of Justice charged Adani, his nephew, and six others with allegedly conspiring to pay USD 265 million in bribes to Indian officials in order to secure lucrative solar power supply contracts, which were projected to generate USD 2 billion in profits over 20 years. Adani Group has denied all charges, calling them baseless, and has pledged to explore all available legal avenues to challenge the accusations. Recently, the DFC stated that it was “actively assessing the ramifications” of the bribery allegations against Adani and his group’s executives. To date, no funds have been disbursed to Adani Ports. As of September 30, Adani Ports reported cash reserves of approximately USD 1.1 billion and an operating profit of USD 2.3 billion over the past 12 months.
