No money given to Adani so far for Sri Lankan port project, says US development agency

Mumbai: The US International Development Finance Corporation (DFC), which last year committed a half-a-billion-dollar loan to the Adani group for developing a port in Sri Lanka, has not yet disbursed any money to the Indian conglomerate.

“The project has not reached financial close or signed a loan agreement,” a DFC official said in response to Mint’s queries. “We continue to conduct due diligence to ensure that all aspects of the project meet our rigorous standards before any loan disbursements are made,” the official said over email.

The US DFC last year committed a $553 million 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. The CWIT is being developed by a consortium of Adani Ports, Sri Lankan conglomerate John Keells Holdings Plc., and the Sri Lanka Ports Authority.

The geopolitically sensitive port project in Sri Lanka is as much of a move by the US to counter Chinese influence in the island nation as it is to help the local economy flourish.

A spokesperson for the Adani group said the Sri Lanka CWIT project was progressing as planned. “Phase 1 of the project is on schedule and is nearing completion. It will become commercially operational by Q1 2025,” the spokesperson said, requesting not to be named.

Incidentally, GQG Partners informed its investors last week that it had built up positions in Adani group companies as new data emerged, including the DFC’s commitment to invest in the Sri Lankan port project with Adani Ports and SEZ Ltd in November 2023.

US-based GQG Partners is one of the largest backers of the Adani group with an exposure of over $8 billion to seven listed Adani firms.

“We perceived this as a positive comment on, if not an endorsement of, the (Adani) group. We find it very surprising that the US government would approve funding and partner in projects with parties that were under DOJ investigation,” GQG said in the note to its investors.

The investment firm did not respond to Mint’s queries sent on Monday.

‘Adani Ports not implicated’

The US Department of Justice and the US Securities and Exchange Commission last week indicted Adani group founder-chairman Gautam Adani, his nephew and Adani Green Energy Ltd executive director Sagar Adani, and Adani Green Energy managing director Vneet Jaain for allegedly paying about $250 million in bribes to Indian government officials to secure solar power supply contracts.

The DFC had identified the project as “highly developmental due to its significant benefits to Sri Lanka’s local economy”.

The DFC did not comment on whether it will continue with the project, excuse itself or seek a different developer. The American lender to developing economies, however, pointed out that Adani Ports has not been implicated by the American prosecutors.

“We are committed to ensuring that our projects and partners uphold the highest standards of integrity and compliance,” the DFC official said.

To be sure, Gautam Adani is also the chairman of Adani Ports and SEZ.

Adani Ports shares closed 3.23% lower on BSE on Tuesday at ₹1,128.8 apiece, while the benchmark Sensex index closed 0.13% lower at 80,004.6 points.