US Agency Reviews Adani’s Sri Lanka Port Loan Over Bribery Allegations

The U.S. International Development Finance Corporation (DFC) is reassessing its decision to lend over $553 million to a port development project in Colombo, Sri Lanka, backed by the Adani Group. This follows bribery allegations against the conglomerate’s founder, Gautam Adani, and other executives.

Loan Still Under Review

Announced last November, the DFC’s planned loan for the Adani-backed project was set to be its biggest infrastructure investment in Asia. But nothing is set in stone yet. “We’re still conducting due diligence to ensure every aspect of the project aligns with our high standards before moving forward,” DFC officials confirmed. No funds have been disbursed, and the project hasn’t reached a financial close. The port project, partly owned by Adani Ports and Special Economic Zone Ltd., is aimed at strengthening U.S. influence in the region and reducing China’s hold.

Bribery Scandal Hits Adani

Last week, U.S. prosecutors accused Adani and others of a $250 million bribery scheme tied to Indian solar contracts, which were expected to yield $2 billion in profits over 20 years. The group has vehemently denied these allegations, calling them “baseless” and vowing to explore legal options. Despite the headlines, the DFC clarified that the bribery charges don’t involve the Adani subsidiary handling the Sri Lanka port.

Financial Turmoil

The scandal has had ripple effects on the conglomerate. Nearly $27 billion in market value was wiped out, bonds took a hit, and one of its entities scrapped a $600 million bond offering. To reassure stakeholders, Adani highlighted cash reserves of $6.33 billion and claimed it has enough liquidity to handle debt repayments for the next 28 months.

Sri Lanka is also reviewing Adani’s proposed wind power projects, and evaluating their feasibility and environmental impact. Currently trading at Rs.1,163.95, the Adani Port’s stock is up 2.39% today, 11.02% year-to-date, and 38.87% over the past year.

Conclusion: With both DFC and Sri Lanka taking a closer look at Adani projects, the group faces mounting pressure to clear its name. For now, the focus remains firmly on transparency and compliance.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.