Adani Ports shares rise after U.S. DFC invests $553 mn in Sri Lanka port project

Shares of Adani Ports and Special Economic Zone Ltd (APSEZ) were trading higher today after the U.S. International Development Finance Corporation (DFC), the U.S. government’s development finance institution committed to lend $553 million (about ₹4,600 crore) to the port arm of billionaire Gautam Adani-led conglomerate for its Sri Lanka’s port project. Adani Port is building a deep-water container terminal at Colombo Port, which is the largest and busiest transshipment port in the Indian Ocean.

The Colombo West International Terminal (CWIT) is a consortium comprising India’s largest port operator Adani Ports and SEZ, Sri Lanka’s leading enterprise John Keells Holdings and the Sri Lanka Ports Authority (SLPA). Adani Group owns a 51% stake in CWIT, followed by 34% by John Keells, and remaining by SLPA. The consortium will develop CWIT on a build, operate and transfer (BOT) basis for a period of 35 years.

“The U.S. International Development Finance Corporation (DFC) today announced it has committed more than half a billion dollars to support the development of a deepwater shipping container terminal in the Port of Colombo, Sri Lanka, that will provide critical infrastructure for the South Asian region,” DFC says in a release.

“The new terminal reflects DFC’s commitment to financing high-quality infrastructure that supports its partner’s development needs, invests in local communities, and is respectful of local financial conditions. The investment further demonstrates the United States’ enduring commitment to Sri Lanka’s economic growth and its regional economic integration, including with India,” the release notes.

The $553 million investment in Colombo West International Terminal Private Limited will support the development of the deepwater west container terminal located within the port of Colombo, DFC says.

This is for the first time that the U.S. government is funding an Adani project through its agencies. The move is being seen as part of the U.S. strategy to counter China’s expansion in Sri Lanka as Beijing made a huge investment of about $2.2 billion in the island nation, including Colombo and Hambantota ports.

“We welcome the association of the U.S. International Development Finance Corporation (DFC), the U.S. government’s development finance institution, in funding the Adani project – and we see this as a reaffirmation by the international community of our vision, our capabilities and our governance,” says Karan Adani, Whole Time Director and CEO, Adani Ports.

“As one of the world’s largest port developers and operators, APSEZ brings to this project not only our proven world-class expertise but also our deep experience in infrastructure creation. When completed, Colombo West International Terminal project will transform the socio-economic landscape, not just in Colombo but across the island, through thousands of direct and indirect new employment opportunities and by massively boosting Sri Lanka’s trade and commerce ecosystem,” he adds.

The port of Colombo has been operating at more than 90% utilisation since 2021, signalling its need for additional capacity. The new terminal will cater to growing economies in the Bay of Bengal, taking advantage of Sri Lanka’s prime position on major shipping routes and its proximity to these expanding markets.

Reacting to the news, Adani Port shares gained as much as 2.3% to ₹816.35 on the BSE in two hours of trade so far. Early today, the Adani group stock opened 0.6% higher at ₹802 against the previous closing price of ₹797.20 on the BSE.

APSEZ shares have risen in the last four out of five sessions and climbed over 6% during the same period, driven by robust quarterly earnings and strong cargo volume. The counter has risen 19% in the past six months and 3% in a month. The stock touched its 52-week low of ₹394.95 on February 3, 2023, and 52-week high of ₹916 on November 16, 2022. 

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