Sri Lanka Revokes Adani Wind Power Pricing Agreement
The Sri Lankan government has annulled the pricing agreement for Adani Group's wind power projects and appointed a review committee to reassess these initiatives. Government spokesperson Nalinda Jayathissa clarified that while the wind power projects in Mannar and Pooneryn are not cancelled, the previously agreed-upon power purchase prices from 2023 have been rejected.
The previous administration, under Ranil Wickremesinghe, had approved 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 due to reports of local bidders offering 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 As a result, the pricing agreement was revoked, and the committee was tasked with revising the projects, including its pricing structure," Jayathissa stated.
Environmental Concerns and Legal Challenges
The agreement with Adani Group is also facing legal challenges, with five court cases pending, primarily initiated by environmental groups. These groups argue that the projects pose a threat to biodiversity and migratory birds. Despite these concerns, Adani Group has denied any reports of project cancellations, calling them false and misleading. Adani Group issued a statement on Friday stating that the wind projects in Sri Lanka have not been cancelled.
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, especially common with a new government. This review aims to ensure that the projects align with current priorities and energy policies. Adani remains committed to investing USD 1 billion in Sri Lanka’s green energy sector, with the goal of driving renewable energy and economic growth.
The committee reviewing the projects will determine necessary changes once their evaluation is complete. The focus remains on ensuring that terms align with the new government's current energy policies and priorities.
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