Sri Lanka and India’s Adani group are in a dispute over the terms of a $442 million renewable energy project in Sri Lanka. The project, approved by Sri Lanka’s Board of Investment in 2023, involves a 484 MW wind farm in Mannar and Poonerin. Adani Green Energy was quoted 8.26 cents per kWh for power supply over 20 years, but Sri Lanka wants to renegotiate the tariff, citing that it is too high. The government of Sri Lanka has issued a letter of intent, but no power purchase agreement (PPA) has been signed. Sources indicate that Sri Lanka wants the tariff to be below 7 cents a unit.
The dispute has sparked controversy, with environmentalists filing a public interest litigation (PIL) against the project in 2024, citing concerns about the tariff leading to losses for Sri Lanka and burdening its consumers. The PIL also mentioned that a Technical Evaluation Committee had suggested a tariff of 5 cents per kWh.
Adani Green Energy has denied reports that the project has been canceled, stating that the Sri Lankan Cabinet’s decision to re-evaluate the tariff is part of a standard review process. The company remains committed to investing $1 billion in Sri Lanka’s green energy sector.
To renegotiate the tariff, the Cabinet papers of the previous regime need to be revoked. Industry experts believe that the project will eventually go through once the tariff terms are amicably resolved. The Adani group has not responded to queries about the project’s status and terms. The dispute highlights the strategic diplomatic stakes involved in the venture, with both parties reluctant to give up on the project.