In a new development to the growing strain between the US and Indian industrialist Gautam Adani following his DOJ and SEC indictments last month, Adani Group announced that it would not seek American funding for its ongoing port project, the Colombo West International Terminal (CWIT), in Sri Lanka.
The port unit of the conglomerate led by Gautam Adani in a late regulatory filing announced that Adani Ports and SEZ Ltd plans to fund the Sri Lankan project with “internal accruals” in line with its capital management strategy and that it had withdrawn its financing request from the US International Development Finance Corporation (DFC) filed in 2023.
The DFC in 2023 had agreed to a USD 553 million loan, one year before the US department of justice (DOJ) indicted Gautam Adani and others on allegedly bribing Indian “officials” and hiding it from American investors of Adani Green Energy. The SEC also brought out a statement specifically naming Gautam Adani and his nephew Sagar Adani in its civil complaint.
While Adani Group refuted allegations that they violations under the US Foreign Corrupt Practices Act (FCPA), they also confirmed the directors were charged on “three counts in the criminal indictment” that comprised “alleged securities fraud conspiracy, alleged wire fraud conspiracy, and alleged securities fraud” in the same announcement in the last week of November.
In an exclusive interview with THE WEEK, UN Environment Programme’s former executive director Erik Solheim said, “…only India can question him, not the US.”
Adani Ports was seeking the loan to aid the development, construction, and operation of a deep-water container terminal at the Port of Colombo in Sri Lanka, which is being developed by a consortium that includes itself, John Keells Holdings, and the Sri Lanka Ports Authority (SLPA). The loan was also in line with the US policy to counter a growing Chinese influence in the region.
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From a maritime point of view, Colombo is a geopolitically important region, especially with the presence of China in the region. The US was actively trying to increase its influence in the region. However, it now would not come to fruition with this port project.
Not only did the DFC state that it was “assessing the ramifications” of the latest allegations against Adani executives, but it also stalled the loan disbursement by asking for an agreement between Adani Ports and the Sri Lanka Ports Authority. Adani Ports, which owns 51 per cent of the project, has now decided to proceed without the US loan under such conditions.
The closest international port in India, the Vizhinjam International Seaport in Thiruvananthapuram, Kerala, is also operated by Adani Ports.
