Adani Group plans to set up a 500-megawatt wind power project in Sri Lanka after successful completion of a $553 million debt financing from the U.S. International Development Finance Corp. for its Colombo West International Terminal.
The group has proposed to the Sri Lankan government to set up the wind project in the northwestern region at an initial investment of $750 million, Karan Adani, chief executive officer of Adani Ports and Special Economic Zone Ltd., told BQ Prime at a post-event interaction in Colombo.
“It will take 24 months for the first phase of the project to get commissioned once the approval comes from the Sri Lankan government,” Adani said.
The west coast of Sri Lanka is blessed with very good wind conditions and has strong potential for the generation of wind power, according to Adani. “The renewable power generated will be the cheapest power that will be sold in the country.”
The group is also planning to set up a cross-country transmission corridor from Sri Lanka that will connect to the Indian power grid on the lines between India and Bangladesh, he said.
$553 Million Funding For Colombo Terminal
Adani Group has received $553 million in funding for its Colombo West International Terminal, which it is setting up in partnership with John Keells Holdings PLC, Sri Lanka’s largest private sector conglomerate.
“This is the first time that the U.S. government, through its agency, DFC, has financed any port-related investment in Sri Lanka or any Adani-operated project,” he said.
Any project financed by the DFC is first approved by the US Congress, Adani said. “It is an approval and reposing of faith in our group’s financial and execution capabilities.”
The tenure of the loan will be for 20 years, with an equity contribution of 30% by the partners. “We are looking at around 16% return on investments from the project,” he said.
Adani Ports is setting up two container terminals at the Port of Colombo, which is the largest and busiest transshipment port in the Indian Ocean. The port has been operating at more than 90% utilisation since 2021 and has required 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.
The first phase of the project is expected to be completed between December 2024 and February 2025, Adani said.
Once completed, the terminals will add 3.2 million 20-foot equivalent container handling capacity at the Colombo Port.
More Strategic Ports
Adani Ports is planning to add more strategic locations to its portfolio of international ports that at present are in Israel’s Haifa and Sri Lanka.
“We are seriously looking at adding port infrastructure in Bangladesh, East Africa, Middle East, southeast Asia and Vietnam,” Adani said. “This has been planned keeping integration of the global supply chain in mind, especially with plan to make India as the hub for our operations.”
The U.S. support for the deepwater terminal through the International Development Finance Corp. underscores New Delhi’s and Washington’s efforts to curtail China’s influence, as it has invested more than $2 billion in Sri Lanka to build infrastructure before the island nation faced economic meltdown.
Adani said the group has also put in a proposal for a renewable business in Sri Lanka as the country is “blessed with good winds” on the west coast. “We plan to set up 500-megawatt wind project in the first phase.”
The conglomerate will also set up a cross-country transmission line to connect Indian grid for power export to India, Adani said.
The planned capex is $750 million and it will be the “cheapest electricity” for Sri Lanka, he said. Shares of Adani Ports and SEZ Ltd. were trading 2.34% higher at 11:35 a.m., close to the day’s high of Rs 816.4 apiece. The benchmark NSE Nifty 50 was up 0.15%.
Source - BQ Prime
- Agencies
