India’s Adani Pulls Out of $1-Billion Sri Lanka Wind Power Deal

Adani Green Energy, the renewables arm of India’s Adani Group, is withdrawing from a planned wind power project in Sri Lanka that would have seen $1 billion in investments, due to disagreements over the power purchase price.

Adani Green Energy has secured most of the permits for the wind power farms at Mannar and Pooneryn, including transmission lines. But a new government of Sri Lanka has signaled it wants to renegotiate the tariffs previously agreed, seeking a lower purchase price.

Sri Lanka aims to reduce the purchase price to $0.06 per kilowatt-hour (kWh) or less, from the $0.08 previously proposed.

The government in Colombo has set up a committee to renegotiate the price, Adani Green Energy said it has learned.

Adani Green Energy Ltd wrote in a letter to Sri Lanka’s Board of Investment that it would “respectfully withdraw” from the wind project.

“It was learned that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal,” the Indian renewable energy firm said in the letter.

“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.”

Adani Group remains open to opportunities in Sri Lanka, it noted.

Sri Lanka and other countries in November began more intense scrutiny of the projects and investments proposed by companies of the Adani Group after the U.S. authorities launched investigations into Adani executives for corruption.

The U.S. Attorney’s Office for the Eastern District of New York and the Securities and Exchange Commission (SEC) have separately charged executives of the Adani group of companies, including billionaire founder Gautam Adani – one of the world’s wealthiest people – of having offered bribes to Indian government officials to secure solar energy contracts and concealing the bribery scheme while obtaining funds from U.S. investors.

By Tsvetana Paraskova for Oilprice.com

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