Monday, December 11, 2023

America Backs Adani’s Colombo Dream with $553 Million Investment

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Adani Ports and Special Economic Zone Limited, a company controlled by billionaire Gautam Adani, saw its stock price rise more than 2% on Wednesday following an announcement from the US International Development Finance Corporation (DFC) indicating that it will provide funding for a project with partial ownership by the Adani Group.

The US International Development Finance Corporation (DFC) has pledged $553 million in funding for the Colombo port terminal project, a collaborative venture involving India’s Adani Ports and SEZ Limited, Sri Lanka’s John Keells Holdings, and the Sri Lanka Ports Authority. “DFC, the U.S. government’s development finance institution, collaborates with private entities to finance solutions to the most pressing challenges in the developing world. Its investments span various sectors, including energy, healthcare, infrastructure, agriculture, small businesses, and financial services,” Adani Ports stated in a release.

This investment marks the first time a U.S. government agency has funded an Adani project, underscoring the strong endorsement of the Adani Group. It reflects their confidence in the Group’s capability to invest and develop a world-class container facility at Colombo Port.

This investment gains particular significance in the wake of accusations by U.S. short-seller Hindenburg Research, who alleged accounting fraud and stock manipulation against Adani. The Adani Group has vehemently refuted these allegations. At one point, Hindenburg’s report caused significant losses to the conglomerate’s market value.

“We welcome the partnership with the US International Development Finance Corporation (DFC) in funding the Adani project. We view it as a reaffirmation by the international community of our vision, capabilities, and governance,” stated Karan Adani, Whole Time Director and CEO of Adani Ports.

Upon completion, the Colombo West International Terminal project will transform the socioeconomic landscape not only in Colombo but across the island. It will create thousands of direct and indirect employment opportunities and substantially boost Sri Lanka’s trade and commerce ecosystem.

The Port of Colombo, the largest and busiest transshipment port in the Indian Ocean, has been operating at over 90% capacity since 2021, highlighting the need for additional capacity. The new terminal will cater to the growing economies in the Bay of Bengal, capitalizing on Sri Lanka’s strategic location on major shipping routes and its proximity to these expanding markets.

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