By: Staff Writer
July 22, Colombo (LNW): Sri Lanka’s renewable energy ambitions have suffered a major blow with the exit of India’s Adani Green Energy from two key wind power projects, raising concerns over policy consistency and investor confidence under the new administration.
The government now faces a financial and reputational cost, as it prepares to pay Rs. 300–500 million in reimbursements to the Indian conglomerate for preliminary expenses incurred on renewable energy ventures in Mannar and Pooneryn. The move follows Adani’s official withdrawal in May this year, prompted by unresolved disputes with the newly elected National People’s Power (NPP) government over the pricing structure for the proposed projects.
The exit signals a potentially deeper issue for Sri Lanka’s renewable energy sector, already under pressure to ramp up capacity amidst rising demand and global calls for green transitions. Adani’s projects, with a projected investment of $442 million and an expected generation capacity of 350 MW, were scheduled to contribute to the national grid by 2025. Their cancellation leaves a significant gap in the country’s clean energy roadmap.
Sources familiar with the development said Adani Green Energy had initially signed the deal with the previous government, which had granted Cabinet approval. However, under the new administration, the agreement encountered resistance — particularly over the pricing terms — leading to delays and eventual collapse.
Following the termination notice in May, the Sustainable Energy Authority (SEA), under instructions from the Energy Ministry, sought legal advice on whether Sri Lanka was liable to repay the company’s initial costs. Legal guidance received this week has supported reimbursing part of the expenses — primarily those tied to project feasibility studies and investigations jointly undertaken with SEA.
However, officials have made it clear that any payments Adani made toward securing energy permits will not be reimbursed. The final figure will be determined after consultations with the Attorney General and approval by the SEA board in the coming months.
“The process of closing the deal will be completed after the settlement of these dues,” a top source confirmed. “Fresh tenders will then be called for the same projects, and Adani will be allowed to compete again if they wish.”
While this offers a potential path back for the Indian investor, the incident underscores the critical need for transparent, consistent energy policies — especially as Sri Lanka attempts to position itself as a regional player in renewable energy.
Analysts warn that such reversals could deter future foreign investment, at a time when Sri Lanka’s economic recovery heavily depends on international partnerships and infrastructure growth
