India's Adani Ports has expanded its footprint in East Africa by acquiring a stake in a Tanzanian container terminal through a joint venture (JV) with Abu Dhabi's logistics giant AD Ports Group. The move strengthens Adani Ports' presence in the region as it seeks to capitalize on growing trade volumes between Africa and India.
The JV, East Africa Gateway Limited (EAGL), established in Abu Dhabi's Khalifa Industrial Zone (KIZAD), acquired a 95% stake in Tanzania International Container Terminal Services Ltd (TICTS) for $39. 5 million from Hutchison Ports Group. The deal, expected to close by the end of June, will see AD Ports hold a 30% stake in the JV, while Adani Ports will hold the majority share through its subsidiary Adani International Ports Holdings Pte Ltd.
This acquisition comes on the heels of Adani Ports winning a 30-year concession agreement earlier this year to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania. The strategic location of the Dar es Salaam Port makes it a crucial gateway for trade between East and Southern Africa and the rest of the world. Adani Ports' investment reflects Tanzania's growing importance as a trade hub and a potential springboard for further expansion into Africa.
The Indian conglomerate has been actively pursuing opportunities across Africa in recent years. In addition to Tanzania, Adani Ports has also secured deals in Mozambique and Kenya, solidifying its position as a key player in the African port sector. Analysts believe that Adani Ports' strategy is to leverage its expertise in port operations and logistics to develop a pan-African network, facilitating trade between India and the continent.
For AD Ports Group, the partnership with Adani Ports presents an opportunity to tap into the rapidly growing Indian market. Dubai, where AD Ports is headquartered, has long been a major trading center between the Middle East and Asia. The JV with Adani Ports strengthens this position by creating a direct link between Africa and India, offering businesses efficient and cost-effective trade routes.
The combined experience and resources of AD Ports and Adani Ports are expected to bring significant benefits to the development of the Tanzanian container terminal. The JV partners plan to leverage their expertise to modernize infrastructure, improve operational efficiency, and enhance the terminal's capacity to handle larger cargo volumes. This will not only benefit the Tanzanian economy by creating jobs and attracting foreign investment but will also streamline trade flows between East Africa and India.
Industry observers view this development as a positive step for the African port sector. Increased investment and collaboration between international port operators are expected to boost overall efficiency and capacity, ultimately benefiting African economies by facilitating trade and economic growth.