Adani Group shows renewed interest in $1-Billion renewable energy project in Sri Lanka

The Adani Group remains interested in reviving its $1-billion renewable energy project in Sri Lanka, sources revealed.

While the company had announced its withdrawal from the project in February, it has kept negotiations open, aiming to reach an agreement on tariffs with Sri Lankan authorities.

Ongoing discussions suggest that a mutually agreeable tariff rate is close to being finalized. A tentative rate of around 7 cents per kWh has been proposed, while Sri Lanka had earlier insisted on a range of 5-6 cents per kWh. Initially, the power purchase agreement for the 484-MW wind farms at Mannar and Pooneryn had proposed a tariff of 8.26 cents per kWh for 20 years.

Sources indicate that work on the project could commence as early as June, provided that all necessary paperwork and preliminary agreements are completed. The Indian government is reportedly supportive of the project, considering it a strategic investment in the island nation.

Adani Green Energy has already invested $5 million in pre-development activities for the project. Despite formally informing Sri Lanka’s Board of Investment about its decision to withdraw, the company has not taken any legal steps to terminate the project. Instead, it has left the door open for future collaborations and potential development opportunities in Sri Lanka.

Negotiations with Sri Lankan authorities, including the Ceylon Electricity Board, had initially stalled over tariff disagreements. The project also involves the development of transmission lines and expansion of the 220 kV and 400 kV transmission network. While most regulatory approvals have been secured, environmental clearance for the Mannar site remains pending.

The project, which was initiated under the previous Sri Lankan administration, faced delays after President Anura Kumara Dissanayake’s government appointed a review committee to reassess the proposed tariff structure. The committee aimed to secure a lower tariff, leading to a temporary setback for the investment.

Adani Group has not responded to requests for clarification regarding the latest developments. However, the renewed negotiations signal a possible revival of the renewable energy project, which could provide significant benefits to Sri Lanka’s energy sector.

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