By: Staff Writer
March 17, Colombo (LNW): The Adani Group has reiterated its intention to withdraw from its wind power project in Sri Lanka, a stance previously communicated to the country’s Board of Investment. However, the company remains open to discussions. In response, Sri Lanka’s Energy Ministry reached out to Adani Green Energy Ltd’s local arm to understand the reasons behind the potential exit.
A senior Sri Lankan government official confirmed that Adani responded within two weeks, indicating that the project remains active. However, the Ministry of Energy is awaiting court decisions and the Attorney General’s clearance before initiating any negotiations. Until legal clarity is achieved, no definitive steps can be taken.
The primary issue causing the deadlock is the tariff rate. While Sri Lanka proposed a tariff of approximately 6 cents per unit, Adani had put forth an offer of around 8 cents per unit. This tariff discrepancy remains a key hurdle in finalizing the agreement.
There was speculation that Indian Prime Minister Narendra Modi’s upcoming visit to Sri Lanka might include discussions on the Adani project, given its government-to-government nature. However, multiple sources from both India and Sri Lanka have denied that this issue is on the agenda.
On March 14, Sri Lanka’s Minister of Power and Energy, Kumara Jayakodi, stated in Parliament that if Adani chooses to exit, the wind power contract in Mannar will be reassigned to another company. The government is currently awaiting a final response from Adani’s local representatives.
Meanwhile, sources suggest that Sri Lanka’s Energy Ministry has informally reached out to other potential investors. The government is also deliberating whether to continue with a direct government-to-government agreement or invite competitive bids for the project.
A significant policy shift is emerging, as Sri Lanka now indicates that all future renewable energy projects, including rooftop solar installations, will be awarded through competitive tenders. The newly formed Sri Lankan Cabinet has also established a committee to address the ongoing tariff dispute.
Adani Green’s initial letter to the Board of Investment in February created uncertainty about the project’s future. A follow-up letter to the Energy Ministry was recently submitted in response to government queries.
In its communication, Adani Green detailed its engagement in extensive discussions with the Ceylon Electricity Board and various government entities for over two years regarding the establishment of 484 MW wind farms in Mannar and Pooneryn.
The project also includes an associated transmission system and network expansion to facilitate power distribution to southern Sri Lanka.
Adani Green further stated that it has obtained almost all necessary clearances except for Mannar’s environmental approval, which remains entangled in a Supreme Court case. The company has already invested approximately $5 million in pre-development activities. Given these significant efforts and investments, the company’s willingness to remain in discussions suggests that negotiations could still yield a viable resolution.As Sri Lanka grapples with its renewable energy ambitions, the fate of this high-profile project remains uncertain. The government’s next steps—whether to renegotiate with Adani or seek alternative investors—will be crucial in determining the country’s renewable energy trajectory.
