Adani Group withdraws from Sri Lanka wind project amid mounting scrutiny

The wind project has been under intense scrutiny since the election of Sri Lanka’s President Anura Kumara Dissanayake in September last year, after he promised to cancel the “corrupt” project in the runup to the elections.

“Our executives recently had discussions with CEB (Ceylon Electricity Board) officials as also with Ministry officials at Colombo. It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal,” Adani Green wrote in a letter to Arjuna Herath, Chairman of the Board of Investment.

“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 it’s choices, it would respectfully withdraw from the said project,” the letter said.

The project has also drawn criticism for its potential impact on a nearby bird corridor and on local fishing communities. Adani Green spent a total of $5 million in pre-developmental activities, including obtaining clearances and arranging for land.

A 20-year power purchase agreement (PPA) was earlier approved for the project, which would have recorded $1 billion in investment from the Adani Group. The wind generation capacity, including some transmission infrastructure, was to come up at Mannar and Pooneryn under the build-own-operate model.

“As we bow out, we wish to reaffirm that we would always be available for Sri Lankan Government to have us undertake any development opportunity, if it ever considers Adani Group to participate,” the letter said.

The Adani Group is also developing a terminal at the Colombo port together with the Sri Lanka Ports Authority (SLPA) and John Keells Holdings. In December, Adani Ports and Special Economic Zone Ltd had withdrawn its request for a $553 million loan from the US International Development Finance Corporation (DFC) for the upcoming terminal.

In November, group chairman Gautam S Adani, his nephew Sagar Adani, and six others were indicted by a United States district court for allegedly offering bribes to the tune of $265 million to Indian government officials to fastrack PPAs for a solar project.

Soon after, Kenya’s President William Ruto cancelled two major deals with the Adani Group that were signed to upgrade its main airport and to build power transmission lines.