March 18, Colombo (LNW): The Adani Group remains determined to push forward with its $1 billion renewable energy project in Sri Lanka, despite announcing its withdrawal from the venture in February, The Hindu reported.
Sources familiar with the ongoing discussions told The Hindu that the company is still actively engaging in talks with the Sri Lankan government, focusing on agreeing to a tariff rate that could pave the way for the project’s revival.
Negotiations over the tariffs, which are critical for the success of the project, are ongoing. A tentative rate of around 7 cents per kWh has been suggested, although the Sri Lankan government had initially sought a lower rate of 5-6 cents per kWh, down from the original proposed 8.26 cents for a 20-year power purchase agreement.
Sources have indicated that both parties are optimistic about reaching a mutually acceptable rate soon.
The timeline for the project’s launch remains fluid, but work could potentially commence as early as June, provided all necessary administrative procedures and approvals are finalised in time.
The Indian government is reportedly supportive of the project, viewing it as a key strategic investment for both nations. This backing from the Indian government could provide a crucial boost to the project’s prospects, sources added.
Despite the earlier announcement of its withdrawal, the Adani Group has not taken any legal steps to formally abandon the project. It has kept a door open for potential future collaborations, reiterating its interest in returning to Sri Lanka for new development opportunities.
Notably, the group had already invested $5 million in pre-development activities for the wind farm project, which includes the construction of two large-scale wind farms in Mannar and Pooneryn, along with necessary transmission lines and the expansion of the 220 kV and 400 kV networks.
Although the project has received most of the necessary regulatory clearances, the environmental approval for the Mannar site remains pending. The initial push for the project came during the previous administration in Sri Lanka, but it faced delays when the current government, led by President Anura Kumara Dissanayake, appointed a committee to reassess the project’s tariff structure.
The government’s push for a more competitive tariff has been a sticking point in negotiations.
The discussions continue and the future of the project hinges on finding a resolution that satisfies both the Adani Group and the Sri Lankan authorities.
With both sides showing a willingness to compromise, the project could yet move forward, potentially bringing significant renewable energy capacity to the island and fostering stronger economic ties between India and Sri Lanka.
