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Gautam Adani’s conglomerate has said it will no longer tap $500mn in US development financing for a Sri Lankan port project after the group’s billionaire chair was accused of orchestrating a multimillion-dollar bribery scheme.
Backing from the US International Development Finance Corporation for the project was announced in November 2023, months after Adani Group had been accused of “brazen” corporate fraud and stock price manipulation by short seller Hindenburg Research.
At the time, the conglomerate described the funding for the Colombo West International Terminal, the DFC’s largest infrastructure investment in Asia, as “a ringing endorsement” of the company. Karan Adani, the billionaire’s son who heads the ports business, said the loan was “a reaffirmation by the international community of our vision, our capabilities and our governance”.
But the conglomerate has pulled out of the loan deal as it wrestles with allegations of bribery brought by the US in November. The terminal “will be financed through the company’s internal accruals and capital management plan”, Adani Group’s ports business said in a statement released late on Tuesday. “We have withdrawn our request for financing from the DFC.”
The withdrawal shows how the Indian conglomerate may be hit by funding constraints in the wake of criminal and civil charges. The company has repeatedly denied any wrongdoing, and Gautam Adani said last month that “every attack makes us stronger”.
The DFC did not immediately respond to a request for comment. Last month, the development financing agency said it had yet to disburse the $553mn loan and was still conducting due diligence.
The loan for the Adani port in Sri Lanka was part of a broader US push to counter China’s expanding influence in south Asia. Officials in Washington have publicly criticised Beijing’s funding of infrastructure projects in various countries for being debt traps. In a visit to Sri Lanka in 2020, Donald Trump’s secretary of state Mike Pompeo called China a “predator”.
Adani, who has been accused by Indian opposition politicians of enjoying favoured treatment from Prime Minister Narendra Modi, has previously criticised China and insisted the investments were designed to meet Sri Lanka’s needs.
The Colombo terminal project, which was due to be operational this month, “is progressing well and is on track for commissioning by early next year”, Adani Ports said.
Still, Adani Group’s investments in Sri Lankan ports and green energy projects during the country’s debt crisis have been criticised by local politicians, who have argued that the deals lack transparency.
The government of Sri Lanka’s new leftist president Anura Kumara Dissanayake has opened investigations into Adani’s projects across the island nation.
The group’s overseas business interests are also coming under scrutiny in other countries. Kenya’s President William Ruto cancelled $2.6bn in proposed deals after the US charges were brought against Adani and his associates. Bangladesh’s caretaker government is also probing cross-border electricity deals with Adani’s power company.
