Adani Green Energy’s withdrawal from its wind power project from Sri Lanka follows months of stout opposition by local communities. The exit was also fueled by the new left-leaning government of Anura Kumara Dissanayake’s unhappiness with the deal. While most companies face reviews of their projects, the Sri Lankan rebuff comes as a reminder that most Adani offshore forays have seen controversy and push backs because they have sought to impose onerous terms.
While an Adani group statement calls it a ‘withdrawal’, the fact is the Sri Lankan government cancelled the deal. The wind power project, signed in May 2024 by former president Ranil Wickremesinghe’s government, was slated to generate 484 MW for coastal belt of Mannar and Pooneryn. However, it was found power purchase rate of $0.0826 Kwh was far higher than offered by local companies.
The ongoing skirmish between Adani Power and the state-owned Bangladesh Power Development Board (BPDB) for the supply of power from the former’s Jharkhand plant has followed a similar trajectory.
A contract was signed in 2017 between the former Bangladesh Prime Minister Sheikh Hasina and Adani Power to supply 800 MW of power generated for Bangladesh by the Godda plant in Jharkhand.
However, there was trouble soon after a new Islamist government led by former banker, Mohammed Yunus, took power on August 5, last year. From October 31, Adani Power cut supply by half after the failure of BPDP to repay its mounting dues. Currently, Bangladesh had asked Adani to restore full generation claiming it is clearing its dues and repaying $85 million a month. Yet the chasm seems to be widening. Adani Power has claimed dues of $900 million, while Bangladesh says it is $650 million.
Underlying the immediate dispute is the Bangladesh charge that Adani’s power costs Bangladesh 55 percent more that sold by other Indian entities to Dhaka. The new government is smarting and has promised to review the Sheikh Hasina contract.
Deals that went wrong
What is common to the Sri Lanka and Bangladesh is the charge that the Adani Group had forced the two host countries to sign PPAs above market value. In both cases there are allegations of arm-twisting by New Delhi.
The recent calendar of botched up Adani offshore projects is pretty crowded. In a state-of-the-nation address on November 21, 2024, Kenyan President William Ruto ordered the cancellation of a procurement process for a 30-year lease to the Adani Group for Nairobi’s Jomo Kenyata International Airport. The award was in exchange for a $2-billion upgradation including a second runaway and refurbishing passenger terminal.
Ruto cancelled a separate 30-year, $736 million public-private partnership with the Group to construct power transmission lines. Public perception saw these contracts as ‘exploitative’. It was, therefore, no surprise that the Kenyan President’s announcements in Parliament drew thunderous applause.
Far away in Queensland, Australia, an Adani subsidiary Bravus Mining & Resources, has faced environmental protests ever since its Carmichael mines were approved for mining coal in 2014. Shipments of coal destined for Asian hubs started from 2021 but the mine has drawn huge criticism for the possible impact of the Great Barrier Reef, water usage and carbon emissions.
More recently, in November last year, Adani’s Bravus Mining faced accusations of racism against aboriginal groups. Representatives from the Nagana Yarrbayn Wangan and Jagalingou Cultural Custodians have filed complaints alleging they were “verbally and physically obstructed and prevented” from performing their cultural rites in the springs near the mining area.
While the Carmichael mine is functional and profitable, Myanmar’s Sittwe Port, on the Arakan coast of Myanmar’s Rakhine state, turned out to be a wild goose chase. Initially the port was developed under a $120 million project with an Indian government line of credit, and was to be a trading link between Kolkata Port and the Myanmar-controlled maritime routes.
Myanmar exit
However, since 2021, after the military coup in Myanmar, Sittwe Port’s development, in the works since 2008, has stalled in the crossfire between the Myanmar Army and Arakan rebels. Before the civil war broke out, Adanis, sensing an opportunity, in May 2019, forged a 50-year pact valued at $150 million to construct and manage a container terminal at Yangon Port.
Later, as the Myanmar civil war hotted up and the US imposed sanctions on Myanmar-junta owned businesses, the project stalled. The Group exited in May 2023 selling the terminal project to a local firm, Solar Energy, for $30 million, a major haircut to the original investment of $120 million.
On balance, the ambitions of the Group to become a multinational powerhouse have not gone well. The fact that US prosecutors charged Gautam Adani in November 2024 for participating in a Rs 2,100 crore bribery scheme in exchange for solar power contracts has not helped the situation.
Perceptions are important and the series of reverses and bad business practices will go into international memory as ‘neo-colonialist’ forays. Big conglomerates like the Adani Group wear the nation’s badge when they do business on foreign soil. It is therefore imperative they not only do their due diligence; but they should also be seen as ethical and above board in their dealings.