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‘False and misleading’: Adani Group denies cancellation of Sri Lanka’s $440 million power purchase deal; Here’s why
- The Adani Group clarified that the Sri Lankan Cabinet’s decision to reevaluate the tariff approved in May 2024 is part of a standard review process, particularly with a new government
The Adani Group denied the cancellation of its Sri Lanka power deal on Friday, January 24, dismissing the media reports as 'false and misleading'. The spokesperson of the ports-to-power conglomerate stated on Friday that Adani’s 484 MW wind power projects in Sri Lanka's Mannar and Pooneryn have not been cancelled, and the reports stating otherwise are “false and misleading”.
“We categorically state that the project has not been cancelled," said the statement. According to the Adani Group, the Sri Lankan Cabinet’s decision of January 2, 2025, to reevaluate the tariff approved in May 2024 is part of a standard review process, particularly with a new government, to ensure that the terms align with their current priorities and energy policies.
Also Read: Adani Green Energy share price dips as Sri Lanka revokes $440 million power purchase deal
Adani Group denies allegations of overseas deal loss
"Adani remains committed to investing $1 billion in Sri Lanka’s green energy sector, driving renewable energy and economic growth,” the spokesperson of the Gautam Adani empire added. It also denied the AFP report that its 20-year deal power purchase agreement (PPA), which was signed in May 2024, had been revoked.
Sri Lanka has reportedly been reviewing the group's local projects after US authorities accused billionaire founder Gautam Adani and other executives of participating in a scheme to pay bribes to secure power supply contracts. The Adani Group has since denied all such allegations.
Earlier today, the Daily FT, Sri Lanka's leading business newspaper, reported that the Sri Lankan Cabinet, led by President Anura Kumara Dissanayake, reversed the decision to award Adani Green Energy SL Ltd a signed contract to build wind power plants in Mannar and Pooneryn.
The decision, made in June last year and sanctioned by Dissanayake's predecessor, Ranil Wickremesinghe, involved a 484 MW wind power project. During his election campaign, the current President promised to cancel the deal and invite international tenders to develop wind power in Sri Lanka.
Following through on this promise, the Cabinet decided on December 30 to revoke the previous cabinet decision made in May 2024, which had approved the Adani Green Energy project. In June 2024, Dissanayake's predecessor, Ranil Wickremesinghe, awarded the project to the company.
Concerns were raised over the arbitrary price of US cents 8.26 per kilowatt hour when the local bidders offered 4.88 cents. Environmental organisations, including the Wildlife and Nature Protection Society and Environmental Foundation Ltd., opposed the project due to certain inadequacies in the Environmental Impact Assessment.
Mannar is a major habitat for migratory birds. The Bishop of Mannar, representing the local community, opposed the project and raised concerns over the possible harm to local industries and livelihoods caused by the Adani project. During the election campaign, President Dissanayake promised to revoke the deal and seek global tenders to develop wind power in Sri Lanka.
Also Read: Adani Energy Solutions Q3 Results: Net profit rises 73% to ₹562 crore, revenue up 28% YoY
Cash-strapped Sri Lanka, which has suffered from power blackouts and fuel shortages, has been trying to speed up green power generation to balance against surges in imported fuel costs. The Adani Group is also developing a $700 million terminal project at Sri Lanka's largest port, Colombo.
Following the US indictment, Kenya has scrapped more than $2.5 billion in deals with the Adani Group overseas, including contracts to develop an airport and build power transmission lines. Adani Green Energy shares closed 1.8 per cent lower on the bourses, while the group's flagship unit, Adani Enterprises, ended nearly three per cent lower in a weak broader market.
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Business NewsCompaniesNews‘False and misleading’: Adani Group denies cancellation of Sri Lanka’s $440 million power purchase deal; Here’s why
First Published:24 Jan 2025, 04:23 PM IST
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