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The Sri Lankan government has terminated a power purchase agreement with Adani Power, a subsidiary of the Indian conglomerate Adani Group, following allegations of corruption and irregularities in the deal.
The agreement was signed in 2015 for the purchase of 300 megawatts of power from Adani Power’s 300-megawatt gas-fired power plant in the Indian city of Mundra, Gujarat. The deal was to generate $1.4 billion in revenue for Adani Power over 20 years.
However, the deal was marred by controversy, with opposition parties and NGOs accusing the previous government of corruption and irregularities in the bidding process. They claimed that the deal was awarded to Adani Power at an inflated cost, which would result in the Sri Lankan government paying exorbitant prices for power.
The current government, led by President Gotabaya Rajapaksa, initiated an investigation into the deal after coming to power in 2019. The investigation found that the deal was indeed tainted by corruption and irregularities, and the power purchase agreement was subsequently terminated.
The Sri Lankan government has launched a new tender process to procure power from other sources, with bids invited from several international and local players. The new tender aims to secure a more competitive and transparent deal for Sri Lanka.
The cancellation of the Adani Power deal is a major setback for the company, which had invested heavily in the project and was set to earn significant revenue from the deal. The deal’s cancellation has also raised concerns about the future of Adani Power’s other projects in India and abroad.
The termination of the deal is seen as a significant blow to the company’s reputation and a major victory for transparency and good governance advocates in Sri Lanka. The move is also seen as a positive step towards promoting sustainable and transparent energy procurement practices in the country.