India's Adani Group Secures $553 Million from DFC

The United States’ International Development Finance Corporation (DFC) announced that it will grant a financing amount of $553 million for a port terminal project in Colombo. This project is partially owned by the Adani Group from India, marking their initial entry into the sector. In 2022, Sri Lanka, an island located off the southern coast of India, experienced its most severe financial crisis in more than seven decades. This dire situation arose as the country's foreign exchange reserves hit unprecedented lows, resulting in a substantial decline of 7.8 per cent in its economy.

The west container terminal of the port, where edible oils are transported, is owned by the Adani group. Indian billionaire Gautam Adani controls 51% of the stake in this terminal. Additionally, there is another terminal in the same port operated by China Merchants Port Holdings Co Ltd.

In a statement, DFC CEO Scott Nathan stated that DFC's dedication of $553 million in private sector loans for the West Container Terminal (WCT) will enhance Sri Lanka's shipping capacity, leading to increased prosperity for the country. This endeavour will not contribute to the national debt and will also bolster the position of our allies in the region.

India extended about $4 billion in swaps and credit lines to Sri Lanka last year, providing critical support to import fuel, medicine and fertiliser during the worst of the crisis.

Dredging for the terminal kicked off last November, with the first stage to be completed in the third quarter of 2024 and the full project to be finished by the end of 2025.