 "Sri Lanka revokes Adani wind power deal; Group denies cancellation claims")
Sri Lanka has revoked the power purchase agreement with the Indian conglomerate Adani Group due to corruption allegations, reported the Agence France Press (AFP) citing sources from the country’s energy ministry on Friday. The Adani Group, however, said that the news is ‘false and misleading’.
Sri Lankan President Anura Kumara Dissanayake, began investigations into Adani’s local projects after Adani Group founder Gautam Adani faced bribery charges in the US last year.
“The government has revoked the power purchase agreement, but the project is not cancelled. A committee has been appointed to review the entire project,” the source said, speaking to AFP on condition of anonymity.
Sri Lanka ‘reviews’ Adani deal
In May 2024, the previous government had agreed to buy electricity at $0.0826 per kilowatt from an Adani wind power plant that has not yet been built in the northwest of Sri Lanka. However, the current administration decided earlier this month to cancel the agreement, but will still review the project.
A senior energy ministry official told AFP that the Sri Lankan government has established a committee to ‘re-evaluate’ the wind power project, but it has not been cancelled. Activists had opposed the deal, arguing that smaller renewable projects were offering electricity at lower prices.
Wind project faces hurdles
Adani Group had proposed establishing two wind farms with a combined capacity of 484MW in the Mannar and Pooneryn areas of Sri Lanka with an investment of $740 million. The project, scheduled to be completed by mid 2026, has run into multiple setbacks including opposition from environmental organisations, facing a separate challenge in the Supreme Court of Sri Lanka over environmental concerns.
Also Read
Project delayed amid scrutiny
President Dissanayake, who took office in September, had promised to fight corruption and recover stolen Sri Lankan assets. Adani Group, which has faced several fraud accusations, denies the bribery charges. The Adani Group, which has interests in various industries like coal, airports, and cement, was Sri Lanka’s first foreign investor after its financial crisis in 2022. However, its $442 million wind power project has been delayed due to legal challenges.
Adani denies project cancellation
The Adani Group has denied the claims regarding the cancellation of its 484 MW wind power projects in Sri Lanka’s Mannar and Pooneryn districts. “We categorically state that the project has not been cancelled,” a spokesperson said in a statement, as reported by ANI on Friday.
The Group clarified that the Sri Lankan Cabinet’s January 2, 2025 decision to re-evaluate the tariff approved in May 2024 is part of a routine review process undertaken by the new government. The review aims to ensure that the terms align with the country’s current energy priorities and policies.