Adani Green Energy has withdrawn from two proposed wind power projects in Sri Lanka, following the new government’s decision to renegotiate tariffs.
The decision was conveyed in a letter sent by the company to Sri Lanka’s Board of Investment, as reported by Reuters.
Adani’s renewable energy division had earmarked a $442 million investment for wind power generation and transmission in Sri Lanka. However, the newly elected administration under President Anura Kumara Dissanayake aimed to reduce electricity costs from Adani’s ongoing energy projects in the country.
“It was learnt that another Cabinet-appointed negotiations committee and project committee would be constituted to renegotiate the project proposal,” Adani Green Energy wrote in its letter, dated February 12, to the Sri Lankan government agency. “This aspect was deliberated at the Board of our company, and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project.”
Adani Green Energy-Sri Lanka govt dispute
Adani Group had originally proposed to develop two wind farms with a total capacity of 484 megawatts in Sri Lanka’s Mannar and Pooneryn regions, with an investment of $740 million. The project, slated for completion by mid-2026, encountered hurdles including opposition from environmental groups and legal challenges in Sri Lanka’s Supreme Court over ecological concerns.
In May 2024, the previous Sri Lankan government agreed to purchase power from an Adani wind plant, yet to be built in the northwest region, at $0.0826 per kilowatt-hour.
Following the bribery accusations, the new administration revoked Adani Group’s power purchase agreement in January and began investigations. The Sri Lankan government then opted to review and renegotiate the terms to bring the cost below $0.06 per unit.
It now seems that they were unable to reach a consensus and Adani has withdrawn the wind power. Following the announcement of Adani Green’s withdrawal, the company’s shares gained 2 per cent, as investors welcomed the resolution of uncertainty surrounding the project.
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