A power purchase agreement between Sri Lanka and the Indian conglomerate Adani Group has been canceled due to corruption allegations, according to sources in the Sri Lanka's energy ministry quoted by AFP in Colombo on Friday.
Ex-President Ranil Wickremesinghe administration in May 2024 agreed to purchase electricity from an Adani wind power complex that was still under construction in the northwest of the island nation for USD 0.0826 per kw.
In late last year, billionaire founder Gautam Adani was charged with bribery in the United States, prompting the administration of President Anura Kumara Dissanayake to launch investigations into the company's local projects.
Environmental concerns have prompted a separate challenge from Sri lankan Supreme Court to Adani's proposed 484-megawatt wind power plant in the coastal regions of Mannar and Pooneryn.
Sri Lanka has formed a committee re-evaluate
The Sri Lankan government has formed a committee to 're-evaluate' the wind power project, but it hasn't been canceled, a senior official in the energy ministry told AFP. The agreement had been contested by activists who claimed that cheaper electricity was being provided by smaller renewable projects.
The Adani Group had suggested investing USD 740 million to build two wind farms in the Mannar and Pooneryn regions of Sri Lanka, with a combined capacity of 484MW.
Due to environmental concerns, the project, which was supposed to be finished by the middle of 2026, has encountered several obstacles, including opposition from environmental organizations and a separate challenge in Sri Lanka's Supreme Court.
Bribery charges on Adani
On November 19, prosecutors in New York charged Indian industrialist Adani with paying bribes and concealing the payments from US investors. The charges have been deemed 'baseless by Adani Group.
The Adani Group, a conglomerate that operates in the coal, cement, airport, and media industries, has been shaken by accusations of corporate fraud in recent years.
Adani denies cancellation of projects in Sri Lanka
Reports that Adani’s 484 MW wind power projects in Mannar and Pooneryn have been cancelled are false and misleading. We categorically state that the PPA has not been revoked.
The Sri Lankan Cabinet’s decision of 2 Jan 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 in Sri Lanka’s green energy sector, driving renewable energy and economic growth.
