Adani Green Energy Cancels Wind Power Project in Sri Lanka

Adani Green Energy Ltd. has decided to withdraw from its $1 billion wind power project in Sri Lanka. The decision comes despite securing most necessary approvals, with the company citing delays, unresolved environmental clearances, and a pending Supreme Court case as reasons for stepping away.

Project Details and Investment

The project was planned to set up 484 MW wind farms in Mannar and Pooneryn, along with a 220 KV and 400 KV transmission network expansion. Adani Green had already spent $5 million on pre-development activities, including securing clearances and working on land acquisition. 

The company had also engaged in multiple rounds of discussions with the Sri Lankan government and electricity board officials regarding power tariffs.

Government Renegotiation and Delays

In May 2024, Adani Green entered a 20-year power purchase agreement with the Sri Lankan government for the project. However, last month, the government sought to lower the power costs from $0.08 per kilowatt-hour (kWh) to $0.06 or less. This led to further discussions, with another Cabinet Appointed Negotiations Committee (CANC) and Project Committee (PC) set to review the terms. 

Finally, the company decided to withdraw amid these renegotiation efforts, calling the project financially unviable.

Environmental and Legal Hurdles

Apart from financial concerns, unresolved environmental approvals in Mannar and an ongoing Supreme Court case added to the uncertainty. The company stated that these issues prolonged the process, making it difficult to move forward.

Statement from Adani Green

In a letter to Sri Lanka’s investment board, Adani Green said its board had deliberated on the situation and decided to withdraw while respecting the country’s sovereign rights. The company also stated that it remains open to future opportunities in Sri Lanka if the government proposes new projects.

Following the announcement, Adani Green Energy shares ended a five-day losing streak and rose 2.1% today, on Thursday. As of 2:56 PM, Adani Green Energy Ltd. is trading at ₹919.50, up ₹2.60 (0.28%) for the day. Over the past month, the stock has risen by 3.34%, but it has declined by 49.35% over the past year.

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