Sri Lanka Revokes Adani Wind Power Pricing Agreement and Appoints Review Committee

The Sri Lankan government has annulled the pricing agreement for Adani Group's wind power projects. A committee has been set up to review these projects. Government spokesperson Nalinda Jayathissa clarified that the wind power initiatives in Mannar and Pooneryn are not cancelled, but the previously negotiated power purchase prices from 2023 have been rejected.

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The previous administration, under Ranil Wickremesinghe, had agreed on a 20-year power purchase deal in May 2024 for Adani's 484 MW wind plants at USD 0.826 per unit. This agreement faced criticism as local bidders reportedly offered lower prices. "We are not agreeable to the prices proposed. As a result, the pricing agreement was revoked, and the committee was tasked with revising the projects, including its pricing structure," Jayathissa added.

Environmental Concerns and Legal Challenges

Five court cases, mostly initiated by environmental groups, are pending against the agreement with Adani Group. These groups argue that the projects threaten biodiversity and migratory birds. Despite these challenges, Adani Group has denied reports of project cancellations, calling them false and misleading.

Adani Group issued a statement on Friday denying any cancellation of its wind 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 project has not been cancelled," it said.

Review Process and Future Investments

The Sri Lankan Cabinet's decision on January 2 to reassess the tariff approved in May 2024 is part of a routine review process. This is especially common with a new government to ensure alignment with current priorities and energy policies. Adani remains committed to investing USD 1 billion in Sri Lanka’s green energy sector, driving renewable energy and economic growth, it said.

The committee reviewing the projects will determine necessary changes once their evaluation is complete. The focus remains on ensuring that terms align with current energy policies and priorities of the new government.