by Our Economic Affairs Editor
Adani Ports and Special Economic Zone (APSEZ) has withdrawn its $553 million loan request from the United States Development Finance Corporation (DFC) for the Colombo West International Terminal (CWIT) project in Sri Lanka. The company announced late Tuesday that it will fund the project internally, ensuring its timely progression without reliance on external financing amidst mounting scrutiny.
The CWIT, located at the Port of Colombo, is a pivotal infrastructure project aimed at addressing the pressing need for expanded container-handling capacity in the Indian Ocean’s busiest transshipment hub. Operating at over 90% capacity since 2021, the Port of Colombo has underscored the urgency of additional terminals to support regional trade. The CWIT is set to enhance Sri Lanka’s strategic position on global shipping routes and facilitate trade in the rapidly growing Bay of Bengal economies. The terminal is progressing well and is on track to begin operations by early 2024, according to APSEZ.
The withdrawal of the loan application comes against the backdrop of investigations into the Adani Group by US authorities, including the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). These investigations pertain to allegations of non-compliance and governance concerns. The DFC, which had approved the loan in 2023 to support the CWIT project, had not disbursed any funds, citing the need for further due diligence.
Responding to queries earlier, a DFC spokesperson had stated that the agency was “actively assessing the implications” of the DOJ investigations into Adani and had deferred any decisions regarding the loan. The DFC emphasised its commitment to upholding the highest standards of compliance and integrity in all its financing projects. It clarified that the loan agreement had not reached financial close and that no funds would be disbursed until the project met its rigorous standards.
Despite the intensified scrutiny, Adani Ports assured stakeholders that the CWIT project remains on schedule and will proceed using internal accruals. The company highlighted its robust capital management strategy, which enables it to fund significant projects independently.
In a statement to the stock exchanges, APSEZ affirmed, “We have withdrawn our request for financing from the DFC.” The company reiterated its commitment to delivering the terminal as planned, underlining its strategic importance in strengthening connectivity for the region’s growing economies.
The CWIT project is part of a consortium involving Adani Ports, John Keells Holdings, and the Sri Lanka Ports Authority. Once completed, the deepwater terminal will play a crucial role in boosting Sri Lanka’s economy by enhancing its competitiveness as a transshipment hub. The new terminal’s location and capabilities are expected to attract additional traffic from key shipping routes and support the increasing trade demands of South Asia and Southeast Asia.
