Sri Lanka revokes power purchasing deal with Adani, say reports 

Sri Lanka has revoked a 2024 power purchase agreement with Adani Green Energy — for a proposed wind power plant in the island’s Northern Province — following corruption allegations, news agency AFP reported on Friday.

“The government has revoked the power purchase agreement, but the project is not cancelled. A committee has been appointed to review the entire project,” the report said, quoting an unnamed senior official from the Energy Ministry.

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The Hindu sought a comment from Sri Lanka’s Ministry of Power and Energy, and is yet to receive a response. The development assumes significance amid President Anura Kumara Dissanayake’s pre-poll pledge to cancel the Adani project. “We welcome foreign capital, including from the private sector. But all investments should come through a fair tender process,” he told The Hindu in a September 2024 interview. “If the government had gone for a fair tender process, we could have got it for half the price,” he noted, barely a fortnight before he assumed charge at the country’s top office, after winning elections on an anti-corruption plank.

Also Read | Adani wind power project sparks concern in Sri Lanka’s Mannar district

When asked about the revocation of the power purchase agreement, a media spokesman of the Adani Group said: ”The Sri Lankan Cabinet’s decision of 2 January 2025 to reevaluate the tariff approved in May 2024 is part of a standard review process, particularly with a new government, to ensure that the terms align with their current priorities and energy policies. Adani remains committed to investing $1 billion [including transmission infrastructure] in Sri Lanka’s green energy sector, driving renewable energy and economic growth.”

The $442-million wind power project, for two wind power plants in Mannar and Pooneryn in northern Sri Lanka, has remained contentious from the time it was approved by the Ranil Wickremesinghe administration in February 2023. In May 2024, his Cabinet cleared a proposal to purchase power at $0.0826, or 8.26 cents, per kWh from Adani Green Energy. The proposal faced fierce opposition from different quarters — environmentalists who feared the project would disrupt a crucial aviation corridor; economists who found the rates exorbitant; and anti-corruption activists who pointed to the absence of a fair tender mechanism allowing for competitive bids.

Also read | Sri Lankan official resigns amid Adani project row 

The main political opposition at the time accused the Adani Group of making a “backdoor entry” into Sri Lanka’s energy sector. The project was later challenged at Sri Lanka’s Supreme Court. In October 2024, the Dissanayake government told Sri Lanka’s Supreme Court that the project agreement needed “comprehensive reevaluation”, implying that it would not proceed with the project until the review is completed. Subsequently, a committee of experts has been appointed to study the project, its compliance with Sri Lanka’s Electricity Act and environmental protection norms. The case is scheduled to be heard again in March 2025.

Meanwhile, the contentious project found no mention in the statements issued by New Delhi and Colombo during President Dissanayake’s state visit to India in December 2024.