(Commonwealth_ The U.S. International Development Finance Corporation (DFC), which partially funds the Colombo Port terminal project in Sri Lanka, is conducting due diligence on the initiative following serious allegations against Adani Group chairman Gautam Adani. The U.S. Department of Justice has accused Adani of fraud in a $250 million bribery scandal, prompting widespread investigations into his multinational ventures.
The DFC, which previously announced a $553 million loan to support the Colombo Port project, has yet to finalize its agreement with Adani Group. Sri Lanka’s John Keells Holdings, the Sri Lanka Ports Authority (SLPA), and the Adani Group, which holds the largest stake, signed this project in 2021 as a joint venture. Initial estimates placed the cost of the project at $700 million.
Allegations and Global Fallout
The allegations against Gautam Adani and six associates have reverberated across the Adani Group’s international operations. The indictment has not only placed Adani and his collaborators under investigation but has also cast doubt on multiple ongoing projects globally. In Kenya, the government recently cancelled a $2.5 billion agreement with the Adani Group for the development and management of electrical transmission lines and the upgrade of Nairobi’s Jomo Kenyatta International Airport (JKIA).
The Adani Group signed the Kenyan deal as a public-private partnership, allowing them to manage the project for 30 years. However, accusations of bribery and fraud have jeopardized the group’s reputation and raised questions about the integrity of its operations.
Domestic Scrutiny in Sri Lanka
In Sri Lanka, the Adani Group was already under scrutiny before the U.S. allegations surfaced. Newly elected President Anura Kumara Dissanayake, who took office in 2024, had promised during his campaign to revisit the Adani Group’s involvement in major projects approved by the previous administration. The group’s wind power project, in particular, became a focal point of debate.
Critics argue that the previous government rushed approvals for Adani-led initiatives without sufficient transparency or competitive bidding processes. The Colombo Port project, although seen as a potential economic boon, has faced similar criticism. Petitioners have even taken the issue to Sri Lanka’s Supreme Court, challenging the legality and terms of the agreements.
The current challenges have the potential to disrupt numerous activities. If the DFC withdraws its support or imposes stricter conditions, Sri Lanka may face difficulties in securing alternative funding. Moreover, the controversy surrounding Adani could discourage other potential investors from engaging in large-scale infrastructure projects in the country.
