By Lakshmi Subramanian Courtesy The Week

The project approved by the Gotabaya Rajapaksa government in 2022 without a competitive tender process was under scanner for a long time

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Adani Green on Thursday announced that the group will withdraw from the two proposed wind power projects and two transmission projects in northern and eastern Sri Lanka. The USD 442 million renewable energy project ran into a controversy due to fierce opposition from the locals due to the environmental impact. 

In a media statement issued an Adani spokesperson said: Adani Green Energy has conveyed its board’s decision to respectfully withdraw from further engagement in the RE wind energy project and two transmission projects in Sri Lanka. However, we remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka so desires.”

The development comes months after the project ran into a controversy due to protests by the locals and a legal battle over the approval granted by the Gotabaya Rajapaksa government in 2022 without a competitive tender process. 

In January this year, months after Anura Kumara Dissanayake took charge as the President of the Island nation, the Adani power project ran into a controversy, when a committee was appointed to review the project. 

In a letter sent to Arjuna Herath, Chairman, Board of Investment in Sri Lanka, Pranesh Darji, company secretary of Adani Green, said that the decision to pull out of the ambitious project which would have brought in $1 billion investment to the country was because of the two review committees appointed by the government to renegotiate the project proposal. 

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In a letter dated February 12, Darji explained that the appointment of two fresh committees to review the project was deliberated by the Board of the 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.” 

The announcement by Adani to cancel the project, however, signals a victory for president Anura and his party colleagues, as he called it a corrupt” project during his election campaign. 

The NPP and Anura during the run-up to the presidential election in 2024 had insisted on a competitive bid for the project. And recently after taking charge as the president, Anura, clarified saying that his government is not for cancelling the project but insisted on renegotiation. 

Anura’s government wanted to renegotiate the power purchase rate which was agreed at 8.26 cents per kilowatt hour. Cabinet spokesperson Nalinda Jayatissa insisted that the rate be lowered from 8.26 to less than six cents per kWh. In fact, Anura’s government even informed the Sri Lankan Supreme Court that it would reconsider the approval granted by Gotabya’s government to the Adani wind power projects.

Adani’s withdrawal from the wind energy projects in Sri Lanka comes as another setback for the Ahmedabad headquartered group as it ran into a controversy after allegations that it bribed government officials in India for entering into pacts with SECI for purchase of solar power from the discos in Tamil Nadu, Andhra Pradesh, Odisha, Chhattisgarh, and Jammu and Kashmir it.