The Wire Staff 
New Delhi: Adani Green Energy Limited (AGEL) has withdrawn from renewable wind energy project and two transmission projects in Sri Lanka, the company announced in a press statement.
The Sri Lankan government had sought to renegotiate the power purchase agreement – estimated to cost a total of $1 billion – to reduce costs, following alleged allegations of bribery against Adani group’s founder Gautam Adani, Reuters reported.
The projects, which included the construction of two wind farms in Mannar and Pooneryn, were expected to generate 484 megawatts of power. However, the Sri Lankan government’s decision to review and renegotiate the terms of the agreement led to Adani Green’s withdrawal.
In a letter to the Sri Lankan Board of Investment, AGEL cited the constitution of a new cabinet-appointed negotiations committee to renegotiate the project proposal as the reason for their withdrawal. Despite securing approvals on tariff and procuring necessary clearances, AGEL expressed respect for Sri Lanka’s sovereign rights and choices.
“In pursuit of said proposal, Adani Green teams had several rounds of discussions with state appointed committees and after more than 14 rounds of discussions, approval was accorded on tariff, fixed for 20 years, for the Power Purchase Agreement,” the letter by AGEL company secretary Pragnesh Darji to Sri Lanka’s Board of Investment (BOI) Chairman Arjuna Herath, mentioned.
The company had procured almost all required clearances, except for the Mannar Environmental approval and a related Supreme Court case. Additionally, AGEL had worked on acquiring land for the project and developing the associated transmission system, incurring expenses of around $5 million, the company stated.
Further, AGEL expressed willingness to participate in future development projects in Sri Lanka, if considered.
“Our executives recently had discussions with CEB officials as also with Ministry officials at Colombo. It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project. As we bow out, we wish to reaffirm that we would always be available for Sri Lankan Government to have us undertake any development opportunity, if it ever considers Adani Group to participate,” the company added.
On January 24, AFP first mentioned in a report that Colombo revoked the 20-year power purchase deal, which was struck in May. Notably, Anura Dissanayake, in the run-up to the presidential election in September, pledged to cancel the deal if he assumed power.
AFP had cited an unnamed senior energy ministry official as saying the agreement was revoked but the project – whose 484 MW power plants are to be located in the country’s north and involve a $442 million investment – was not cancelled. Similarly, Financial Times had also reported on January 24 that Dissanayake’s cabinet in a meeting last month decided to revoke the purchase deal, citing minutes dated January 2.
However, the Adani Group had issued a statement the same day saying that reports saying the project stood cancelled were “false and misleading”.
On January 24, the Adani Group had mentioned that the cabinet’s decision to “re-evaluate 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.”
As per reports, the Sri Lankan government had initially agreed to pay 8.26 cents per unit, sparking controversy and lawsuits from activists concerned about the environmental impact and high tariff. According to documents filed in court, a cabinet decision on January 2 overturned a previous decision made in May 2024 regarding the tariff for Adani’s 484MW project. However, the government remained tight-lipped, citing the ongoing court case as the reason for not making a final decision on the Adani deals.