India’s Adani decides to pull out of Sri Lanka wind power projects

India’s Adani Green Energy has told Sri Lanka it will withdraw from two proposed wind power projects, the company said on Thursday, two weeks after Colombo said it was seeking to lower the cost of the power generated.

Sri Lanka began reviewing Adani Group projects after U.S. authorities in November accused billionaire founder Gautam Adani and other executives of being part of a scheme to pay bribes to secure Indian power supply deals, charges the firm has denied.

Last month, the government said it had begun talks with the Adani Group to trim the cost of power from the projects, estimated to cost a total of $1 billion, to about $0.06 per kilowatt-hour (kWh) or less, versus an earlier figure of $0.08.

The group withdrew from the projects as they were “financially unviable,” a Adani spokesperson said.

“It was learnt that another cabinet-appointed negotiations committee and project committee would be constituted to renegotiate the project proposal,” the company told the chairman of the island nation’s investment board in a letter.

“This aspect was deliberated at the board … and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw,” it added in Wednesday’s letter, seen by Reuters.

In a statement on Thursday, Adani Green said it was committed to Sri Lanka and was open to future collaboration if the government in Colombo desired, however.

Sri Lanka’s investment board declined to comment, while the secretary of the power ministry could not immediately be reached to seek comment.

Adani Green’s deal with Sri Lanka envisaged construction of two wind power projects in the northern town of Mannar and village of Pooneryn, along with two transmission projects.

The Adani Group is also involved in building a $700-million terminal project at the country’s largest port in Colombo.

Cash-strapped Sri Lanka, which suffered crippling power blackouts and fuel shortages during an economic crisis in 2022, has been trying to fast-track renewable energy projects to hedge against surges in imported fuel costs. (Reuters)