CWIT, An Adani’s JV in Sri Lanka To Get $553 Mn Fund from U.S. Development Finance Institution (DFC)

• U.S. fund will support development of deepwater shipping container terminal in the Port of Colombo
• Will facilitate private sector-led growth and attract crucial foreign exchange to Sri Lanka to aid in its economic recovery
• U.S., Sri Lanka and India to foster an enduring legacy of cooperation in the development of sustainable infrastructure, like smart and green ports
• U.S. International Development Finance Corporation (DFC) has announced that it will be funding Colombo West International Terminal Pvt. Ltd. (CWIT) – a consortium of India's largest port operator Adani Ports and SEZ Ltd., Sri Lanka's leading enterprise John Keells Holdings (JKH) and the Sri Lanka Ports Authority – to the tune of USD 553 million. 

The U.S. International Development Finance Corporation (DFC) today announced it has committed more than half a billion dollars i.e. USD $553 million, 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.

This is the first time that the U.S. government, through one of its agencies, is funding an Adani project, which is as a ringing endorsement of the Adani Group. It shows their confidence in the Group’s ability to invest and to create a world class container facility in Colombo Port.

DFC will be funding Colombo West International Terminal Pvt. Ltd. (CWIT) – a consortium of India's largest port operator Adani Ports and SEZ Ltd., Sri Lanka's leading enterprise John Keells Holdings (JKH) and the Sri Lanka Ports Authority – to the tune of USD 553 million.

“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,” said Mr Karan Adani, Whole Time Director and CEO, Adani Ports and Special Economic Zone. “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.”

I extend my heartfelt congratulations to @DFCgov, the Sri Lankan government, @slpauthority, and @JohnKeellsGroup for the joint efforts in supporting the transformative West Container Terminal project in Colombo. This initiative is set to generate significant employment… pic.twitter.com/V29NYnD6GW

— Gautam Adani (@gautam_adani) November 8, 2023

The Port of Colombo is the largest and busiest transshipment port in the Indian Ocean. It has been operating at more than 90% utilization 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.

“DFC works to drive private sector investments that advance development and economic growth while strengthening the strategic positions of our partners. That’s what we’re delivering with this infrastructure investment in the Port of Colombo,” said DFC CEO Mr Scott Nathan. “Sri Lanka is one of the world’s key transit hubs, with half of all container ships transiting through its waters. DFC’s commitment of $553 million in private-sector loans for the West Container Terminal will expand its shipping capacity, creating greater prosperity for Sri Lanka – without adding to sovereign debt – while at the same time strengthening the position of our allies across the region.”

NEWS: The US just launched over half a billion dollars in a critical infrastructure investment at the Port of Colombo. DFC’s $553M loan will build a container terminal that will position Sri Lanka as a global shipping hub & deliver lasting economic growth.https://t.co/jAFznalxlj pic.twitter.com/wz4DEbNKKh

— DFCgov (@DFCgov) November 8, 2023

U.S. Ambassador to Sri Lanka Ms Julie Chung said, “The $553 million investment by DFC for the long-term development of the Port of Colombo’s West Container Terminal will facilitate private sector-led growth in Sri Lanka and attract crucial foreign exchange inflows during its economic recovery. Sri Lanka regaining its economic footing will further our shared vision for a free and prosperous Indo-Pacific.”

Mr Krishan Balendra, Chairperson, John Keells Holdings, said” DFC’s investment is an endorsement of the potential of the West Terminal project and a boost for investor confidence as Sri Lanka’s economy recovers”.

The Adani Group is expanding its global footprint through strategic investments in emerging markets. Adani Ports has positioned itself as the market leader in the transport logistics and energy utility portfolio businesses, focusing on largescale infrastructure development in India with operations and management practices benchmarked to global standards. Through its continued commitment to creating stellar and sustainable assets, the Group is playing a vital role in building a better future for India and the world.

The Port of Colombo is the largest and busiest transshipment port in the Indian Ocean. It has been operating at more than 90 percent utilization since 2021, signaling 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.

NeoGrowth Raises $20 Mn via ECBs from DFC

Funds to be used for onward lending to SMEs

NeoGrowth, India’s leading NBFC lender with a focus on Micro, Small & Medium Enterprises (MSMEs), today announced that it has secured funding from the United States International Development Finance Corporation (DFC) for USD 20 million via External Commercial Borrowing (ECB) route.

U.S. International Development Finance Corporation (DFC) is America’s development finance institution. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. They invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets.

DFC investments adhere to high standards and respect the environment, human rights, and worker rights. DFC has a large investment portfolio in India, including in health, agriculture, renewable energy, climate solutions, and other critical sectors.

Arun Nayyar, Whole-time Director and CEO, said, “NeoGrowth is funding India’s small businesses by leveraging the digital ecosystem and this backing from DFC will help us drive that mission further while also creating a positive impact on SMEs. We will be using these funds to further extend credit to our customers to propel their business growth.”

James Polan, DFC’s Vice President of the Office of Development Credit, said, “DFC’s investment in NeoGrowth will increase access to capital for small businesses in India. NeoGrowth’s digital, flexible model enables it to reach more small businesses, promoting financial inclusion, economic growth, and development across the country.

This funding commitment is for 5 years with a 2-year moratorium on principal payment and will be utilised for onward lending to SME customers as per ECB guidelines.

With close to a decade in SME lending, NeoGrowth has engaged with 1 lac+ customers and disbursed over USD 1 billion in loans across 25 locations in India. The company’s digital payments-based lending, modular product suite, analytics-based underwriting, and flexible repayment options are key to enabling credit access to SMEs. The company is continuously innovating to meet the financing needs of its customers for their various business needs.

NeoGrowth is a new-age digital lender, with a focus on Micro, Small, and Medium Enterprises (MSMEs). We are a Systemically Important, Non-Deposit taking Non- Banking Financial Company (NBFC-ND-SI), offering a wide range of products tailored to the dynamic needs of small businesses. Our data science and technology-led approach enable us to offer quick and hassle-free loans to MSMEs across 70+ segments across 25+ cities in India. We offer a unique daily repayment option to our customers with multi-channel repayment modes. We have served and engaged with 1,00,000+ businesses and supported them with their growth ambitions. We not only help small businesses grow but also drive financial inclusion making a positive social impact.

Founded by industry veterans, our Board of Directors comprises experts, who guide the leadership team toward our strategic goals. NeoGrowth is backed by renowned investors, namely Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, IIFL Seed Ventures Fund, WestBridge, and Leapfrog Investments.

For more details, www.neogrowth.in

EdTech Startup Varthana Gets $15 Mn Loan from US Govt's Finance Agency USIDFC

An American financial organisation has agreed to sanction USD 15 million loan to an Indian education start-up to expand the access to quality education by providing critical financing to schools that serve low-income students in India.

The financing will help Bengaluru-based Varthana to reach more schools by meeting its need for long-term capital that is unavailable in the Indian market, US International Development Finance Corporation (DFC) said in a statement.

The DFC, America's Development Bank, said that the financing will be especially critical as schools work to adapt to and recover from disruptions caused by the coronavirus pandemic.

In addition to providing timely loans, Varthana has been helping schools implement digital learning tools and teaching methods so that students can continue their education remotely through the pandemic, it said.

Set up by Brajesh Mishra and Steve Hardgrave in 2013, Varthana supports more than 3,500 schools with 84,000 teachers and 2.5 million students, in particularly among low-income populations across the country.

The company utilises a unique cash-flow underwriting model that enables it to flexibly and sustainably provide loans to low-fee schools. The typical Varthana borrower operates a school that charges USD 5 to USD 25 per month in fees.

India's economy has grown rapidly over the last several decades, but more investment in education will be required to keep pace with this growth and extend its benefits across a broader segment of the Indian society, the DFC said.

Low-fee private schools have stepped in to provide low- and middle-income families access to quality, affordable education.

However, these schools need better access to financing in order to grow and improve, it said.

DFC CEO Adam Boehler said this will help low-income students in India access quality education so they can learn, thrive and give back to their communities.

Varthana is a testament to the impact that early-stage ventures can deliver when given the opportunity to scale their innovative approaches, he said.

"As a specialised lender to affordable private schools, Varthana is well positioned to provide both capital and remote education solutions to help schools navigate the current challenges.

"DFC's willingness to provide funding in the midst of this crisis truly demonstrates their commitment to support the education sector when it needs the most, and for that we are very grateful,” said Varthana CEO Hardgrave. PTI LKJ