By: Staff Writer
August 17, Colombo (LNW): The Sri Lankan government confirmed yesterday (August 17, 2025) that only the refundable deposits placed by the Adani Group for the proposed Mannar Wind Power project will be reimbursed. Energy Minister Kumara Jayakody, addressing reporters at the Government Information Department, emphasized that while the Sustainable Energy Authority (SEA) will determine what qualifies as refundable, non-refundable deposits will not be repaid
.Adani Green Energy had committed approximately US $442 million to develop two wind power facilities in Mannar and Pooneryn, with a combined output of 484 MW under a 20-year power purchase agreement set in May 2024. The agreed tariff stood at 8.26 US cents per kilowatt-hour (kWh)
Following a change in government, Cabinet moved to review and renegotiate the tariff, seeking to lower it to around 6 US cents per kWh or even below
A government committee had been convened to conduct this review, although reports later emerged that the power purchase agreement had been revoked amid scrutiny linked to U.S. bribery allegations involving Adani executives
The Adani Group initially denied cancellation claims, calling them “false and misleading,” and stating the review was standard practice under the new administration
However, months later, the company formally announced its withdrawal from the projects, citing the renegotiation process as misaligned with its expectations. At that stage, it confirmed having spent around $5 million in pre-development activities
In the absence of the project and with Adani pulling out, Sri Lanka now faces a dilemma: proceed with potentially more expensive power procurement—or seek alternatives.
If the government rejects the proposal due to elevated tariffs, there is no financial obligation to return non-refundable deposits or early-stage expenditures already made by Adani, while only the limited refundable portion is set to be reimbursed. The SEA’s forthcoming breakdown will clarify how much that actually is.
The rejection or derailment of Adani’s proposal could have mixed implications. On one hand, Sri Lanka avoids locking in a higher-cost renewable energy deal—especially one priced at 8.26 cents per kWh, which critics argue is substantially above more competitive renewables being pursued locally
On the other hand, cutting ties with a major foreign investor may dampen investor confidence and delay urgently needed green energy deployment.
The final financial impact hinges on what portion of the deposits are refundable—if nominal, the state saves immediate costs but sacrifices future renewable capacity. Conversely, a larger refundable amount would require more immediate fiscal outlay. Meanwhile, Sri Lanka’s push for cost-effective renewable energy continues, but investor caution and project delays may slow progress.
