Adani Revisits Sri Lanka Wind Projects Amid Push for Lower Tariffs
Adani Group is reevaluating the feasibility of its wind power projects in Sri Lanka after the country’s new government demanded lower electricity tariffs, creating another hurdle for billionaire Gautam Adani’s international expansion efforts, Bloomberg reports.
The government, under President Anura Kumara Dissanayake, has requested that Adani Green Energy Ltd. reduce power prices for planned wind farms in Mannar and Pooneryn to below 6 US cents per unit. This marks a significant cut from the 8.26 US cents per unit agreed upon by the previous administration in May, according to cabinet spokesman Nalinda Jayatissa.
Sources familiar with the matter, who spoke to Bloomberg on condition of anonymity, indicated that a reduction of at least 27% could render the projects financially unviable unless the Sri Lankan government introduces new incentives. One source suggested there might be room for adjustments if economic concessions are provided.
The Adani Group has declined to comment on the issue, while Sri Lanka’s energy ministry has not yet clarified whether the lower tariff demand could jeopardise the project’s viability.
This tariff dispute adds to a series of challenges for the conglomerate, which has encountered obstacles in its overseas ventures. In Bangladesh, the company faced financial disputes over unpaid dues, while in Kenya, its infrastructure plans were scrapped following a US bribery investigation involving Adani.
The renegotiation of Adani’s power agreement aligns with Dissanayake’s campaign promises to combat corruption. His administration had already signalled in October that it intended to review the deal, which has faced legal challenges from environmental groups and criticism over transparency concerns.
Should Adani Group withdraw from these projects, it could have broader geopolitical implications. The move might undermine India’s strategy to counter China’s influence in Sri Lanka, where Beijing has invested heavily in infrastructure, including ports and highways.
The Adani Group is also developing a port terminal in Colombo, a project that was set to be backed by a $553 million loan from the U.S. International Development Finance Corporation. However, in December, the Indian conglomerate opted to withdraw from the financing arrangement following the public disclosure of a U.S. investigation.
