Adani Ports and Special Economic Zone (SEZ) Ltd, led by billionaire Gautam Adani, announced on Tuesday (December 11, 2024) that it will no longer rely on U.S. funding for the Colombo West International Terminal (CWIT) project in Sri Lanka. Instead, the company plans to complete the project using its own resources, aligning with its capital management strategy.
In an official statement filed late Tuesday, Adani Ports confirmed that the CWIT project is on schedule and is expected to be operational by the first quarter of 2025. The company also stated that it has withdrawn its 2023 request for a $553 million loan from the U.S. International Development Finance Corporation (DFC), which had initially been part of the U.S. government’s efforts to counter China’s influence in the region.
Why the Funding Was Withdrawn
The loan process had faced delays after the DFC requested amendments to the agreement between Adani and the Sri Lanka Ports Authority (SLPA). Additionally, the U.S. agency said it was assessing the implications of bribery allegations against Adani group executives. The U.S. Department of Justice recently charged Gautam Adani and others with alleged bribery involving solar power contracts. Adani Group has denied these charges and vowed to take legal action.
About the Colombo West International Terminal (CWIT)
The CWIT, located in the Port of Colombo, is being developed by a consortium comprising Adani Ports (holding a 51% stake), Sri Lankan conglomerate John Keells Holdings Plc, and the SLPA. With a quay length of 1,400 meters and a depth of 20 meters, the terminal will be capable of handling Ultra Large Container Vessels (ULCVs) and is expected to process over 3.2 million TEUs annually.
The Port of Colombo, a critical transshipment hub in the Indian Ocean, has been operating at over 90% capacity since 2021. The CWIT is set to enhance the port’s capacity, addressing growing trade demands in the Bay of Bengal region and beyond.
Geopolitical Significance
The project has drawn attention due to its geopolitical importance. The U.S. had seen the development as a way to counter China’s Belt and Road Initiative, which has a strong presence in Sri Lanka. Despite the absence of U.S. funding, the terminal’s completion will strengthen Sri Lanka’s position as a key player in global shipping routes.
Financial Preparedness
Adani Ports reported cash reserves of $1.1 billion (₹8,893 crore) as of September 30, 2024, and an operating profit of $2.3 billion (₹18,846 crore) over the past year. The company’s financial health enables it to proceed with the project without external funding.
The CWIT project, initiated in September 2021, is seen as a significant step in boosting Sri Lanka’s economic prospects and supporting India’s strategic interests in the Indian Ocean.