Sri Lanka not seeking to renegotiate Adani power deal, says top official from Energy Ministry

Adani Green — which had pledged an investment of $442 million in wind power plants in Mannar and Pooneryn — informed Sri Lanka’s Board of Investment (BOI) in a letter dated February 12, 2025, that it would “respectfully withdraw” from the project, even as the government sought a lower tariff for power purchase. In a media statement, a spokesperson of the Adani Group said: “We remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka so desires.”

However, indicating that the outreach on such a future investment must come from the company’s side, and not Sri Lanka’s, KTM Udayanga Hemapala, Secretary to the Ministry of Energy, told The Hindu: “The company has decided to withdraw from the project, it is their call. We are now in the process of addressing the legal requirements after they decided to close the project. But if the company wishes to return, and commits an investment through the BOI, we are open to talking to them based on our position that the tariff must be lower,” he said. While the government is keen to bring in foreign investments to Sri Lanka, it would not lobby any specific investor, he added. “We welcome all investors through proper channels, they must follow due process. We will ensure that the investments are beneficial to our people.”

Citing ongoing cases at Sri Lankan courts challenging the Adani power project, Secretary Hemapala said the petitions were based on three main concerns: whether the project was to be considered “Government-to-Government”, the validity of the Environmental Impact Assessment (EIA) undertaken, and the power-purchasing tariff.

Adani Green’s recent decision to withdraw from the project came weeks after President Anura Kumara Dissanayake’s Cabinet revoked a 2024 power purchasing agreement — signed by the predecessor President Ranil Wickremesinghe administration — according to which Sri Lanka was to purchase power at $0.0826, or 8.26 cents, per kWh from Adani Green Energy.

The Cabinet decision was in line with President Dissanayake’s view that Adani Green’s tariff for the project was high, and went against his government’s stated aim of bringing down the electricity tariff by 30 per cent in the next five years. Further, the Cabinet had appointed a committee to reevaluate the project. In response, a spokesman of the Adani Group told the media on January 24, 2024, that the Sri Lankan government’s decision to reevaluate the tariff was part of a “standard review process”, and categorically denied the project was cancelled as had been reported by some media. But, in just over a fortnight, Adani Green withdrew its investment.