"Sri Lanka Finalizes Power Purchase Agreement with Adani Green"

Sri Lanka has finalized a deal to purchase electricity from Adani Green Energy at a rate of $0.0826, or 8.26 cents, per kWh as part of a 20-year power purchase agreement (PPA) for a wind power project in Mannar and Pooneryn, in the Northern Province. The deal, approved by Sri Lanka's Cabinet on Monday, will see Adani Green Energy develop wind power stations with a combined capacity of 484 MW.

Minister of Power and Energy Kanchana Wijesekera announced the details on the social media platform ‘X’, explaining that at the current exchange rate of $1 = ₹300, the cost of energy would be ₹24.78 per kWh. This is significantly lower than the current average cost of energy in Sri Lanka, which stands at ₹39.02 per kWh. The Minister indicated that payments will be made in Sri Lankan Rupees (LKR), with rates subject to the prevailing exchange rate at the time of payment, though further details on potential rate revisions are awaited.

The $442-million wind power project in northern Sri Lanka is Adani Group's second significant investment in the country, following its $700-million investment in the West Container Terminal at the Colombo port. The development of the wind power stations aligns with Sri Lanka's aim to generate 100% renewable energy within the next 25 years, with authorities committing to adding 2,800 MW to the national grid through renewable sources in the next three years.

However, the project has not been without controversy. Some residents of Mannar and environmentalists have raised concerns about its potential impact on local biodiversity and livelihoods. Adani Green Energy and Sri Lankan authorities have stated that environmental considerations were taken into account before moving forward with the project.

Beyond this deal, India and Sri Lanka are exploring a high-capacity power grid interconnection between the two countries. In February, the India-Sri Lanka Joint Working Group for cooperation in the power sector held its 5th round of discussions in Colombo. A proposal to link Anuradhapura in Sri Lanka's North Central Province with Chennai via land cables and undersea transmission is under consideration, aiming to bolster regional energy cooperation.

Overall, the new agreement with Adani Green Energy represents a significant step in Sri Lanka's energy transformation towards more sustainable and cost-effective power sources.

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