Sri Lanka has reportedly decided to revoke the wind power project awarded to the Indian conglomerate Adani Group last year. The agreement, which has been surrounded by controversy over its cost and environmental concerns, has been scrapped as the port-to-power group faces corruption allegations.
The Sri Lankan Cabinet, led by President Anura Kumara Dissanayake, revoked the power purchase agreement with the Gautam Adani-led group, as per AFP and local news portal Daily FT.
In May 2024, the then-President Ranil Wickremesinghe-led government entered into an agreement with the port-to-power group to procure electricity at a rate of $0.0826 per kW. The Adani Group planned to construct a 484 MW wind power plant in the coastal areas of Mannar and Pooneryn.
According to the AFP report, which cites officials from Sri Lanka's energy ministry, the government has revoked the agreement and set up a committee to review the entire project.
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Controversies Over Adani's project
According to local outlets, the Adani wind power project in Sri Lanka faced intense opposition on several grounds. The project's pricing was a major concern, with the agreed-upon rate being significantly higher than what local bidders had offered.
Meanwhile, environmental organisations, including the Wildlife and Nature Protection Society and Environmental Foundation, also voiced strong objections due to the project's potential harm to migratory birds and the inadequate Environmental Impact Assessment. The local community, led by the Bishop of Mannar, protested the project's threat to local industries and livelihoods.
President Dissanayake had promised to cancel the deal during his election campaign last year, pledging instead to invite international tenders for wind power development in Sri Lanka. The original contract was under review by the Sri Lankan Supreme Court, expected to be taken up in March 2025. However, the revocation means the matter has been taken away from the court, local reports say.
The Sri Lankan government's decision comes amid controversy surrounding the Adani Group, which has been charged in the United States on November 19 for allegedly making bribe payments and concealing transactions from US investors. The group has dismissed these charges as "baseless".
An Adani Group spokesperson told ET that "the project has not been cancelled" and the government's decision to review the process is part of a "standard review process".
"Adani remains committed to investing $1 billion in Sri Lanka's green energy sector, driving renewable energy and economic growth," said the Adani Group.
