Adani Green Exits Controversial $442 Million Renewable Energy Project in Sri Lanka.

Adani Green has pulled out of a controversial $442-million renewable energy project in northern Sri Lanka amid strong local opposition and legal battles over its approval and environmental impact.

The company’s exit marks a significant retreat from its investment push in India’s neighboring countries. It also serves as a political victory for Sri Lanka’s President Anura Kumara Dissanayake, who, ahead of his September 2024 election, had pledged to cancel what he called a “corrupt” project. However, after taking office, his government showed willingness to renegotiate the deal.

In January, the Dissanayake administration revoked a 2024 power purchasing agreement originally approved by the previous Ranil Wickremesinghe government. The agreement had set the purchase price at $0.0826 per kWh from Adani Green, with the new administration seeking a lower tariff.

In a February 12 letter to Sri Lanka’s Board of Investment, Adani Green stated that following the government’s decision to renegotiate, it had opted to “respectfully withdraw from the said project,” while acknowledging Sri Lanka’s sovereign rights and choices. The company cited prolonged discussions with the Ceylon Electricity Board over the 484 MW wind farms planned for Mannar and Pooneryn, noting that the total investment, including transmission networks, was expected to reach nearly $1 billion under the “build-own-operate” model.

The project had been contentious since its approval by the Gotabaya Rajapaksa administration in 2022, as it bypassed a competitive bidding process. Despite opposition concerns over transparency, the Wickremesinghe government moved ahead with the project. Residents of Mannar and environmental activists also challenged it in Sri Lanka’s Supreme Court, raising concerns about potential damage to a key aviation corridor and other environmental risks.

Adani Green’s decision to withdraw underscores the complex political and regulatory landscape surrounding major infrastructure projects in Sri Lanka.

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