Adani Enterprises has set up a company in Kenya to expand and operate Nairobi’s Jomo Kenyatta International Airport (JKIA). The company, Airports Infrastructure, is looking to take over the management of JKIA. The move drew protests from the country’s transport workers over potential job losses.
Adani Enterprises has proposed an investment of $750 million for a new terminal and taxiway system by 2029 to the Kenyan authorities, with an additional $92 million for improvements by 2035. If the deal is struck, it will be Adani’s first airport outside of India. It currently operates a little over half a dozen airports in the country. Kenya’s government has defended the deal as a necessary measure to refurbish JKIA — one of Africa’s busiest hubs — which is often hit by power outages and leaking roofs. The government said last month that the deal would be “subjected to technical, financial and legal reviews alongside requisite due processes”.
Adani’s entry into Africa is seen as part of its challenge to China which has funded gargantuan infrastructure projects in the continent. Adani’s other global infrastructure moves have rivalled China and given India important strategic and economic footholds in other countries.
Adani’s strategic global play
Though many Indian infrastructure companies are operating in other smaller countries — homegrown player GMR operates the Mactan Cebu International Airport in the Philippines and has also bagged deals to operate airports in Greece and Indonesia — Adani’s global infrastructure play, especially in ports, in recent years has competed with Chinese investments. It’s the first time Adani is stepping into the aviation sector abroad.Adani Ports & Special Economic Zone Ltd., the world’s largest logistics operator by market value, is either already operating a port or gearing up for it in four overseas locations, as it tries to challenge China’s dominance of the Indian Ocean trade infrastructure. It plans to take over more seaports around the globe, especially in the Middle East, Africa and Southeast Asia, to transform India into a major trading hub. “We are working on making India the center point of the overall supply chain from east to west,” Karan Adani, Managing Director of the company, has told Bloomberg. “We will take positions wherever we have to for achieving this.”Adani’s expansion into smaller countries also ties into India’s push to organise the Global South as a bloc of countries. Last year, the African Union formally took its seat as a new member of the G20 at the invitation of summit host Prime Minister Modi.The Adani Group seeks to extend its footprint in Africa through strategic partnerships that align with local developmental priorities. It is exploring strategic partnership with Tanzania. Adani Ports has secured a 30-year concession agreement through its subsidiary, Adani International Ports Holdings Pte Ltd. (AIPH), to operate and manage a container terminal at the Dar es Salaam Port in Tanzania.
Taking on China
Gautam Adani, the Chairman of Adani Group, spoke two years ago about the opportunity he saw in the decline of China’s project to spread a global footprint. “I anticipate that China, which was seen as the foremost champion of globalization, will feel increasingly isolated. Increasing nationalism, supply chain risk mitigation, and technology restrictions will have an impact,” Adani said, referring to China’s scuppering Belt and Road Initiative that envisaged connecting China with dozens of countries through roads, railways, shipping lanes, ports and other infrastructure and energy projects, and provide China strategic footholds all over the world.
Last year, the US invested more than half a billion dollars in a port terminal in Sri Lanka’s capital being developed by Adani. The financing by the American government’s International Development Finance Corporation (DFC) was seen as the US backing Indian interests in Sri Lanka to curtail China’s influence in South Asia.
Securing a foothold in Colombo’s new port was seen as particularly important for India, with China constructing the adjacent Colombo Port City, a Dubai-like financial hub, and operating the Colombo International Container Terminals Ltd.
Adani also operates the Haifa Port in northern Israel along with a local company after it completed its purchase for $1.03 billion in January this year. Haifa is one of the main seaports in Israel, where about 99% of all goods move in and out of the country by sea. This too was seen as a move to curtail China’s influence. China’s Shanghai International Port Group already operates a port at Haifa.
China got a port in Haifa in 2021 to strengthen its BRI project. Adani buying another port close by will not only boost India’s trade ambitions but actually prove to be a counter to the BRI as the proposed India-Middle East-Europe Economic Corridor (IMEEC) is being seen by many as a challenge to China’s BRI.
Haifa is a major trade hub on the Mediterranean that gives access to European markets. It will boost trade lanes with the company’s Indian ports and could better connect Europe and the Middle East in the longer term, as well as give Indian goods a direct route to Europe.
Adani also plans to build ports in Vietnam and Indonesia, and looks for more opportunities in the Middle East, Southeast Asia, East Africa, Bangladesh, Sri Lanka, Maldives, Vietnam and Cambodia as these are regions where trade is coming to India. “The idea is to make India a maritime hub,” Karan, the elder son of Gautam Adani, said. “We are targeting countries that are high on manufacturing or high on population, which will lead to high consumption. We are focusing on export volumes in these countries.”
While Adani is the largest ports business in India, it is still a small player overseas. It’ll need to scale up manifold before challenging China’s wide sphere of influence, which is built on investments in more than 90 ports outside its borders, 13 of which have majority Chinese ownership, according to the US Council on Foreign Relations. “Given that Beijing is so far out front, it’s hard for Adani or anyone else to hold a candle to China’s infrastructure investments anytime in the foreseeable future,” Michael Kugelman, director of the South Asia Institute at the Wilson Center in Washington, has told Bloomberg. “But Adani and his companies are playing a long game. They’re looking to slowly but consistently build out new investments in South Asia and beyond.”
(With inputs from agencies)