Adani Green Energy pulls out of $1 billion Sri Lanka project

NEW DELHI: Adani Green Energy has pulls out of two proposed wind power projects and linked transmission lines, which would have seen a total investment of about $1 billion, in Sri Lanka after Colombo sought to trim the tariff.

The company wrote to Sri Lanka’s Board of Investment on Wednesday to convey its decision. “Adani Green Energy has conveyed its board’s decision to withdraw from further engagement regarding these projects. However, we remain committed to Sri Lanka and are open to future collaboration if the government (there) so desires,” a company spokesperson said on Thursday.

The agreement for the project was signed in May 2024 when an interim government headed by president Ranil Wikremesinghe was in power. The project entailed building two wind farms with a total capacity of 484 MW in Mannar and Pooneryn regions along with transmission lines to evacuate power. These were to be completed by 2026.

It came under scrutiny after Anura Kumara Dissanayake won the presidential election in September 2024 on anti-corruption plank and a promise to cancel the deal. In January, his government revoked the power purchase agreement along with orders to review the project and renegotiate the tariff from $0.08 per unit to $0.06 or lower.

This followed the US justice department in November named chairman Gautam Adani and other top executives in connection with alleged bribery of Indian government officials for securing power supply deal with Andhra Pradesh — a charge the group has strongly denied.

The Adani group found the revised tariff economically unviable, but told the Board of Investments it respected Sri Lanka government’s sovereign right to review the project and would be open to taking up any development project in future if the government wanted.

The project has been facing opposition from environmental groups and legal challenges in Sri Lanka’s Supreme Court over adverse impact on a bird corridor and fishermen’s livelihood.

The Adani group also has a port project in Sri Lanka, wherein Adani Ports and Special Economic Zone Ltd is developing a strategically important terminal — Colombo West International Terminal.