Adani Green Withdraws from Controversial $442 Million Renewable Energy Project in Sri Lanka
Adani Green has announced its withdrawal from a $442-million renewable energy project in northern Sri Lanka. The wind farm project, which had been mired in controversy and legal disputes, has faced strong opposition from local communities and environmental activists.
The project, which planned to establish 484 MW of wind capacity in Mannar and Pooneryn, had been approved under the government of former President Gotabaya Rajapaksa in 2022. However, it quickly became the centre of intense controversy. The approval of the project bypassed a competitive bidding process, which led to accusations of lack of transparency and corruption. It also sparked fears among residents in the region, with many raising concerns about the environmental risks, particularly regarding the potential damage to a key aviation corridor.
Adding to the project’s complexities, it faced legal challenges from local residents and environmental groups. The Supreme Court of Sri Lanka also saw petitions filed against the development, with activists warning that the wind farms would cause significant harm to the environment and local livelihoods. Despite the protests, the previous government under Prime Minister Ranil Wickremesinghe moved forward with the project. However, the political landscape in Sri Lanka changed with the election of President Anura Kumara Dissanayake in 2024. During his campaign, Dissanayake had strongly opposed the project, labelling it a “corrupt deal” and pledging to cancel it once in power. Upon assuming office, his administration revoked the power purchasing agreement (PPA) that had been signed in 2024, which had originally set the purchase price for electricity at $0.0826 per kWh. The new government sought to renegotiate the deal and push for a lower tariff.
In a formal letter to Sri Lanka’s Board of Investment on February 12, Adani Green announced its decision to “respectfully withdraw” from the project following the government’s decision to renegotiate the terms. The company acknowledged Sri Lanka’s sovereign rights and choices while stating that the lengthy discussions with the Ceylon Electricity Board had been a significant factor in its decision. Adani Green also cited the uncertainty surrounding the future of the project as a reason for pulling out, especially as the investment, which included transmission networks, was expected to approach $1 billion. The withdrawal of Adani Green marks a significant retreat for the company from its ambitious push to expand its footprint in neighbouring countries. This exit is seen as a political victory for President Dissanayake, who had vowed to cancel the project during his campaign. His government’s decision to renegotiate the deal has, however, underscored the broader challenges faced by foreign investors in Sri Lanka, where political changes and local opposition can quickly alter the landscape for major infrastructure projects.
For Sri Lanka, the withdrawal represents another setback in its push to develop renewable energy resources, which are essential for meeting the country’s energy needs and reducing reliance on fossil fuels. Despite the challenges, the Dissanayake government has expressed its willingness to renegotiate such agreements and ensure that new projects meet both economic and environmental standards. As Adani Green exits the Sri Lankan market, the future of the wind farm project remains uncertain. However, the political and legal obstacles that led to the company’s withdrawal highlight the complexities of large-scale energy investments in Sri Lanka, especially when local communities, environmental concerns, and shifting political landscapes come into play.
