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.

Adani group did not immediately respond to Mint’s queries on the matter.

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.

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.

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‘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.

In 2023, the US DFC committed a $553 million loan to support the development, construction, and operation of a deep water container terminal at the Port of Colombo in Sri Lanka. The Colombo West International Terminal (CWIT)—a consortium of 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 had identified the project as “highly developmental due to its significant benefits to Sri Lanka’s local economy”.

Also read | Adani bribery case: US SEC summons Gautam Adani, Sagar Adani

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 were down 2.64% in afternoon trading on NSE at ₹1,136.05 apiece, while the benchmark Nifty50 index was trending down 20 points at 24,207.80.

Also read | Adani bulls cut positions before news of US indictment