The Crossbill Team
Adani Green Energy Limited (AGEL) has announced its withdrawal from a renewable wind energy project and two transmission projects in Sri Lanka, citing the government’s decision to renegotiate the terms of the agreement.
The Sri Lankan government had sought to revise the power purchase agreement—estimated at $1 billion—in an effort to reduce costs. This move followed allegations of bribery against Adani Group’s founder, Gautam Adani, according to a Reuters report.
The projects, which involved the development of two wind farms in Mannar and Pooneryn, were expected to generate 484 megawatts of power.
However, after Sri Lanka’s cabinet appointed a new negotiations committee to reassess the project terms, Adani Green decided to step back.
In a letter to the Sri Lankan Board of Investment (BOI), AGEL cited the government’s decision to constitute a fresh Cabinet-Appointed Negotiations Committee (CANC) and Project Committee (PC) as the reason for its withdrawal. Despite having secured approvals on tariffs and completing most regulatory clearances, AGEL stated that it respected Sri Lanka’s sovereign decisions.
“It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project,” AGEL’s Company Secretary Pragnesh Darji wrote to BOI Chairman Arjuna Herath.
The statement mentioned that before withdrawing from the projects, Adani Green Energy teams engaged in over 14 rounds of discussions with state-appointed committees.
“Our teams engaged in more than 14 rounds of discussions with government committees, and after extensive deliberations, tariff approval was granted for a fixed 20-year period under the Power Purchase Agreement,” the letter said.
While AGEL had obtained almost all necessary approvals, it was awaiting Mannar environmental clearance and the resolution of a Supreme Court case. The company also worked on acquiring land and developing the transmission infrastructure, incurring an estimated $5 million in expenses.
Despite withdrawing from the current project, Adani Green reaffirmed its interest in future collaborations with Sri Lanka.
“Our executives recently had discussions with CEB officials as also with Ministry officials at Colombo. It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project. As we bow out, we wish to reaffirm that we would always be available for the Sri Lankan government to have us undertake any development opportunity, if it ever considers Adani Group to participate. We wish to convey our best wishes and gratitude to the government of Sri Lanka for the opportunity of engagement,” AGEL added.
Background on the Power Purchase Agreement
On January 24, AFP reported that the Sri Lankan government had annulled the 20-year power purchase agreement, originally finalized in May 2024. Presidential candidate Anura Dissanayake in the run-up to the presidential election had vowed to scrap the deal if elected.
Quoting a senior Energy Ministry official, AFP stated that while the agreement was revoked, the 484 MW power project, involving a $442 million investment, was still under review. Financial Times also reported that the Sri Lankan cabinet had decided to revoke the purchase deal during a meeting on January 2.
However, on the same day, the Adani Group dismissed reports of the project’s cancellation as “false and misleading.” The company clarified that the government’s decision to re-evaluate the approved tariff was part of a standard review process, especially with a new administration in place, to align terms with evolving energy policies and priorities.
The Sri Lankan government had sought to revise the power purchase agreement—estimated at $1 billion—in an effort to reduce costs. This move followed allegations of bribery against Adani Group’s founder, Gautam Adani, according to a Reuters report.
The projects, which involved the development of two wind farms in Mannar and Pooneryn, were expected to generate 484 megawatts of power.
However, after Sri Lanka’s cabinet appointed a new negotiations committee to reassess the project terms, Adani Green decided to step back.
In a letter to the Sri Lankan Board of Investment (BOI), AGEL cited the government’s decision to constitute a fresh Cabinet-Appointed Negotiations Committee (CANC) and Project Committee (PC) as the reason for its withdrawal. Despite having secured approvals on tariffs and completing most regulatory clearances, AGEL stated that it respected Sri Lanka’s sovereign decisions.
“It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project,” AGEL’s Company Secretary Pragnesh Darji wrote to BOI Chairman Arjuna Herath.
The statement mentioned that before withdrawing from the projects, Adani Green Energy teams engaged in over 14 rounds of discussions with state-appointed committees.
“Our teams engaged in more than 14 rounds of discussions with government committees, and after extensive deliberations, tariff approval was granted for a fixed 20-year period under the Power Purchase Agreement,” the letter said.
While AGEL had obtained almost all necessary approvals, it was awaiting Mannar environmental clearance and the resolution of a Supreme Court case. The company also worked on acquiring land and developing the transmission infrastructure, incurring an estimated $5 million in expenses.
Despite withdrawing from the current project, Adani Green reaffirmed its interest in future collaborations with Sri Lanka.
“Our executives recently had discussions with CEB officials as also with Ministry officials at Colombo. It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project. As we bow out, we wish to reaffirm that we would always be available for the Sri Lankan government to have us undertake any development opportunity, if it ever considers Adani Group to participate. We wish to convey our best wishes and gratitude to the government of Sri Lanka for the opportunity of engagement,” AGEL added.
Background on the Power Purchase Agreement
On January 24, AFP reported that the Sri Lankan government had annulled the 20-year power purchase agreement, originally finalized in May 2024. Presidential candidate Anura Dissanayake in the run-up to the presidential election had vowed to scrap the deal if elected.
Quoting a senior Energy Ministry official, AFP stated that while the agreement was revoked, the 484 MW power project, involving a $442 million investment, was still under review. Financial Times also reported that the Sri Lankan cabinet had decided to revoke the purchase deal during a meeting on January 2.
However, on the same day, the Adani Group dismissed reports of the project’s cancellation as “false and misleading.” The company clarified that the government’s decision to re-evaluate the approved tariff was part of a standard review process, especially with a new administration in place, to align terms with evolving energy policies and priorities.
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