Adani Green Energy has decided to withdraw its wind energy project and two transmission projects in Sri Lanka, following strong local opposition and increased scrutiny over how the projects were approved by the previous government.
The move is seen as a political victory for Sri Lankan President Anura Kumara Dissanayake, who had vowed to cancel the deal during his election campaign.
“Adani Green Energy has conveyed its Board’s decision to respectfully withdraw from further engagement in the RE wind energy project and two transmission projects in Sri Lanka. However, we remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka so desires,” said an Adani Group spokesperson on Thursday.
Sri Lanka’s Cabinet, led by President Dissanayake, has decided to revoke the power purchase agreement with the Adani Group. According to officials from Sri Lanka’s Ministry of Energy, the government has cancelled the deal and formed a committee to review the entire project.
The wind power project, which planned to generate 484 MW in the coastal areas of Mannar and Pooneryn, was signed in May 2024 under former President Ranil Wickremesinghe’s administration.
The agreement set an electricity procurement rate of USD 0.0826 per kWh, significantly higher than rates offered by local bidders. This pricing discrepancy fuelled criticism and resistance from local stakeholders.
Environmental groups, including the Wildlife and Nature Protection Society and the Environmental Foundation, strongly objected to the project, citing concerns about its impact on migratory birds and an inadequate Environmental Impact Assessment (EIA). Local communities, led by the Bishop of Mannar, also protested, warning that the project could disrupt industries and threaten livelihoods.
The Adani Group's exit from the wind energy project comes as Sri Lanka reviews the company's operations in the country, following the US Department of Justice’s indictment of Adani Group chairman Gautam Adani and seven others on bribery charges in November last year. The Adani Group has denied the allegations, calling them baseless.
Despite withdrawing from the wind energy and transmission projects, the Adani Group is continuing with the construction of the West Container Terminal at Colombo Port in partnership with the Sri Lanka Ports Authority (SLPA) and conglomerate John Keells Holdings.
An Adani Group spokesperson clarified that the project had not been formally cancelled and that the government's decision was part of a "standard review process." The company maintained its commitment to investing USD 1 billion in Sri Lanka's green energy sector, aiming to drive renewable energy development and economic growth.