Adani has so far not received funding for Sri Lanka port project, US development agency says

MUMBAI: The US International Development Finance Corporation (DFC) last year committed a $500 million loan to Adani Group to develop a port in Sri Lanka but has not yet disbursed any funds to the Indian group.

“The project has not yet reached financial close or signed a loan agreement,” a DFC official said in response to Mint’s query. “We will continue to conduct due diligence to ensure that all aspects of the project meet our strict standards before issuing any loan,” the official said in an email.

Adani Group did not immediately respond to Mint’s query on the matter.

The geopolitically sensitive port project in Sri Lanka is both a U.S. move to counter China’s influence in the island nation and to help the local economy prosper.

Incidentally, GQG Partners informed investors last week that it had increased its holdings in Adani Group of Companies as new data emerged, including DFC’s commitment to invest in a Sri Lankan port project with Adani Ports and Special Economic Zone Limited in November 2023 position.

US-based GQG Partners is one of the Adani Group’s largest backers, with investments in seven Adani-listed companies exceeding $8 billion.

“We view this as a positive comment, even an endorsement, of the (Adani) Group. We are very surprised that the U.S. government would approve funding and work on projects with parties under investigation by the Department of Justice,” GQG told investors stated in the report.

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

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“Adani Ports are not implicated”

The U.S. Department of Justice and the U.S. Securities and Exchange Commission last week indicted Adani Group founder and chairman Gautam Adani and his nephew Sagar Adani, executive director of Adani Green Energy Ltd. ) and Vneet Jaain, managing director of Adani Green Energy Ltd., for allegedly paying approximately $250 million in bribes to Indian government officials to obtain solar power contracts.

In 2023, the U.S. DFC promised to provide a loan of US$553 million to support the development, construction and operation of the deep-water container terminal at the Port of Colombo in Sri Lanka. The Colombo West International Terminal (CWIT), a consortium formed by Adani Ports, Sri Lankan conglomerate John Keells Holdings Plc. and the Sri Lanka Ports Authority, is expected to enhance regional connectivity and trade.

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

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DFC did not comment on whether it would proceed with the project, defend itself or seek another developer. However, the U.S. bank, which lends to developing economies, noted that Adani Ports had not been implicated by U.S. prosecutors.

“We are committed to ensuring that our programs and partners adhere to the highest standards of integrity and compliance,” DFC officials said.

What is certain is that Gautam Adani is also the chairman of Adani Ports and Special Economic Zone.

Adani Ports shares fell 2.64% in afternoon trade on NSE $1,136.05 per share, while the benchmark Nifty50 index fell 20 points to 24,207.80.

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