Adani’s $440M Sri Lanka Wind Power Deal Faces Major Setback as New Government Reconsiders Approval

Sri Lanka’s new government, led by Anura Kumara Dissanayake, is rethinking its approval of a major wind power project by India’s Adani Group. On Monday, the Attorney General’s office informed the Supreme Court that the new administration plans to review the project, which was previously given the go-ahead by the former government.

Concerns Over Electricity Tariff and Pricing

The project, run by Adani Green Energy Ltd., has faced issues related to its pricing. According to Sri Lanka’s Foreign Minister Vijitha Herath, there were concerns about the electricity tariff approved for the project. The government plans to re-evaluate it after the parliamentary elections scheduled for November 14.

This move follows promises made by President Dissanayake during his election campaign. He pledged to protect Sri Lanka’s energy independence and questioned the Adani deal. Dissanayake had promised to cancel the project, and it seems his government is moving in that direction.

Final Decision Pending After November Elections

A final decision will be made after the new Cabinet is formed following the November 14 elections. The National People’s Power (NPP) alliance, led by Dissanayake, was highly critical of the project during the campaign, calling it a threat to the country’s energy sector. They argued that the terms of the deal needed to be renegotiated.

The Adani Group had committed over $440 million to develop 484 megawatts of wind power in the northeastern regions of Mannar and Pooneryn, under a 20-year agreement. However, the project has faced legal challenges, with concerns raised about its environmental impact and the transparency of the approval process.

Critics Demand Lower Electricity Tariff

Critics have also objected to the electricity tariff set at USD 0.0826 per kWh, claiming it would result in financial losses for Sri Lanka. They proposed a lower rate of USD 0.005 per kWh, which is significantly less than the original deal.

Impact on Adani’s Broader Plans in Sri Lanka

If the project is canceled or modified, it would be a setback for Gautam Adani, Asia’s second-richest person, who has broader plans for infrastructure projects in Sri Lanka, including the expansion of the Colombo container-ship port. Environmental groups have also voiced concerns about the impact on wildlife and the transparency of the project’s approval. As the situation unfolds, the future of Adani’s investments in Sri Lanka remains uncertain.