Adani Ports and Special Economic Zone said it has withdrawn its request for $553 million funding from the US Development Finance Corporation for completing the port project in Sri Lanka, saying that it would fund the project through its internal accruals.

“We have withdrawn our request for financing from the DFC, ”the company said in an exchange filing. “The project will be financed through the company’s internal accruals and capital management plan.” It added that the project in Sri Lanka was progressing well and on track for commissioning by early next year.

The company ended September with cash balances of ₹8,893 crore and net debt of ₹35,236 crore. In a recent note on the company and overseas bonds issued by it, JP Morgan had said it was overweight on four bond issuances since they were underpinned by strong cashflows. It has around $290 million of debt repayments coming up next month, which is backed by a pledge of Haifa Port in Israel.

Sources within the group said that Adani Ports had sufficient resources and cash flows to finance the project, saying that it had amassed a $3 billion war chest for acquisitions. They also said that the decision to withdraw the request for funding was to ensure autonomy over the project. According to a presentation, the company generated cashflows of over ₹15,000 crore in FY24. It has a planned capex of ₹80,000 crore over the next four years and has said its net cashflow from operations will be far higher.

Post the US indictment of Adani officials over bribery allegations, there has been speculation whether the DFC funding would stand.

In 2023, the Adani group had signed an agreement to construct a deepwater container terminal in Sri Lanka and the US DFC had committed to funding the project. This was the first time that the US government, through one of its agencies, was funding an Adani project. It was seen as an endorsement of the group, which had been attacked earlier that year by short seller Hindenburg Research, that had accused it of various malpractices. It was also a strategic investment for the US in that area, since Colombo Port is an important and busy transhipment port in the Indian Ocean.

The project Colombo West International Terminal is a consortium of Adani Ports, Sri Lanka’s John Keells Holdings and the Sri Lanka Ports Authority. After the indictment of senior officials of the Adani group by US prosecutors last month, Sri Lankan authorities had expressed their support to the group as well as to the project.

Colombo West International Terminal will be developed on a build, operate and transfer basis for a period of 35 years. When commissioned, CWIT will be the largest and deepest container terminal in Sri Lanka. With a quay length of 1,400 metres and an alongside depth of 20 metres CWIT will be equipped to handle ultra large container vessels with capacities of 24,000 TEUs. The new terminal’s annual cargo handling capacity is likely to exceed 3.2 million TEUs.

Adani Ports also has an operations and maintenance contracts for two ports in Australia, and Tanzania, and it is understood to be scouting around for more acquisitions in Europe.

Published on December 11, 2024