Adani Group Rejects Claims of Sri Lankan Wind Power Project Cancellation Amidst Political and Environmental Scrutiny
The Adani Group has vehemently denied reports circulating in Sri Lankan media that its 484 MW wind power projects in Mannar and Pooneryn have been cancelled. A Sri Lankan business newspaper initially reported that the cabinet, led by President Anura Kumara Dissanayake, had revoked the contract awarded to Adani Green Energy SL by the previous administration. The report suggested that President Dissanayake had pledged to cancel the Adani deal and open the projects to international bidding to bolster Sri Lanka’s wind power generation capacity. The Adani Group dismissed these claims as "false and misleading," reaffirming its commitment to invest $1 billion in Sri Lanka’s renewable energy sector.
The company clarified that the Sri Lankan cabinet’s decision on January 2nd to re-evaluate the tariff approved in May 2024 is a standard review process undertaken by new governments to align project terms with their current priorities and energy policies. This reassessment, according to Adani, does not signify a cancellation of the project, but rather a due diligence exercise common with changes in administration. The Adani Group emphasized that they are actively engaged with the Sri Lankan government to ensure the projects proceed smoothly and contribute to the nation’s sustainable energy goals.
The wind power projects, situated in the Northern Province of Sri Lanka, represent a significant investment of $442 million by Adani Green Energy. The 20-year power purchase agreement stipulates a tariff of 8.26 cents per kilowatt-hour (kWh). The projects, approved in February 2023, are expected to significantly enhance Sri Lanka’s renewable energy portfolio. However, the projects have also attracted controversy and opposition, primarily from environmental organizations raising concerns about the adequacy of the Environmental Impact Assessment.
Adding to the complexities surrounding the projects, the Bishop of Mannar, representing the local community, has voiced concerns about the potential impact on the livelihoods and well-being of the people in the affected areas. These concerns underscore the delicate balance between promoting renewable energy development and addressing the social and environmental impacts on local communities. The Adani Group will likely need to engage actively with these stakeholders to address their concerns and build consensus around the projects’ implementation.
This controversy comes on the heels of Adani’s withdrawal from a $553 million US Development Finance Corporation (DFC) funding for a port project in Sri Lanka. While the company cited internal restructuring as the reason for its withdrawal from the port project, the confluence of these events raises questions about the Adani Group’s overall strategy in Sri Lanka. The wind power projects represent a substantial investment in the country’s renewable energy future, and their successful implementation is crucial for both Adani and Sri Lanka.
The future of the Adani wind power projects remains uncertain as the Sri Lankan government conducts its review of the tariff agreement. The outcome of this review will be closely watched by investors, environmental groups, and the local communities affected by the projects. The Adani Group’s ability to navigate the political, environmental, and social complexities surrounding these projects will be a key test of its commitment to sustainable investment and its long-term strategy in Sri Lanka. The company’s response to the ongoing scrutiny and its engagement with stakeholders will ultimately determine the success or failure of these ambitious renewable energy ventures.