Monday Jan 27, 2025
Monday Jan 27, 2025
Monday, 27 January 2025 02:38 - - {{hitsCtrl.values.hits}}
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Adani Group Chairman Gautam Adani
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Energy giant Adani is facing a fresh hurdle in Sri Lanka for its $ 1 billion investment in green energy. As exclusively reported by the Daily FT on Friday, President Anura Kumara Dissanayake-led new Cabinet on 30 December decided to revoke Adani Energy’s 484 MW wind power energy plants in Mannar and Pooneryn approved by the Ranil Wickremesinghe administration in March 2022 as well as in August 2023.
President Dissanayake and his Cabinet discussed the new Cabinet paper by the Energy Minister titled “Apprising the Cabinet of Ministers with regard to the Court cases pertaining to the projects for the development of Wind Power Plants in Mannar and Pooneryn by Adani Green Energy SL Ltd.”
Before deciding to revoke, on 30 December, the Cabinet considered the following,
1) The report dated 2024-12-11 submitted by the Secretary, Ministry of Energy in terms of the Cabinet decision No. 24/Misc (039) dated 2024-10-07
2) The observations of the Finance, Planning and Economic Development Minister dated 2024-12-27 and,
3) The observations of the Justice and National Integration Minister dated 2024-12-30
After discussion, based on the facts and recommendations submitted by the Energy Ministry Secretary, it was decided as per the Cabinet decision
(i) “to revoke the Cabinet decision dated 2024-05-06 on the Memorandum dated 2024-05-03 numbered as CP No. 24/0850/621/047 submitted by the Minister of Power and Energy on “Proposal of Adani Green Energy SL Limited for the development of 484MW of wind power plants in Mannar and Pooneryn”,
(ii) to grant approval to appoint a Project Committee and a Cabinet Appointed Negotiating Committee to re-evaluate the proposal submitted by Adani Green Energy SL Limited., for the development of 484MW of wind power plants in Mannar and Pooneryn, and
(iii) to direct the Secretary, Ministry of Energy to take action to inform the Attorney General expeditiously, of the Government’s stand reflected in the decisions referred to at (i) and (ii) regarding the proposal submitted by Adani Green Energy SL Ltd. for the development of 484MW of wind power plants in Mannar and Pooneryn, for necessary action.
The new Cabinet also decided on 30 December 2024 to “treat this decision as confirmed and to authorise the Secretary to the Cabinet of Ministers to convey the same to the relevant authorities for necessary action accordingly.”
The Attorney General, Energy Ministry, Ceylon Electricity Board and Sustainable Energy Authority of Sri Lanka were listed as parties to carry out follow up action.
On account of the news of the deal being revoked, Adani Energy Solutions share price on Friday by 3% and Adani Green Energy by 2% and by 6% from the day’s high and Adani Enterprises by 3%.
On its part Adani later on Friday denied cancellation of its 484 MW wind power project in Mannar and Pooneryn.
In a statement Adani said reports of cancellation are “false and misleading.”
“We categorically state that the project has not been cancelled. The Sri Lankan Cabinet’s decision of 2 Jan 2025 to re-evaluate 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,” Adani said.
“Adani remains committed to investing $ 1 billion in Sri Lanka’s green energy sector, driving renewable energy and economic growth,” the statement added.
In a related development, Cabinet Spokesman Minister Dr. Nalinda Jayatissa speaking at a special briefing on Saturday said Adani Energy projects haven’t been terminated.
He clarified that the Government had only annulled a cabinet decision by the previous administration related to high power purchasing agreement. A committee has now been appointed to review the project and address concerns.
“The project has not been cancelled,” Minister Jayatissa said. “The Government is renegotiating the pricing with the Adani Group to ensure the terms align with the country’s current priorities and energy policies.”
He further noted that several legal cases have been filed against the project by environmentalists, and the Government is closely monitoring their progress before making a final decision.
Under the previously approved deal, Adani Green Energy was to build 484 MW wind power stations with a total investment of $ 442 million. The company would be paid 8.26 cents per kilowatt-hour (kWh).
“If the Government now brings a Cabinet paper to award the projects of Adani at a lower but still unreasonably high price, that could possibly be cause for a separate protest and litigation,” activists said.
In Friday’s article, the Daily FT quoted biodiversity scientist Rohan Pethiyagoda, who for the last year fought tirelessly against the proposal award, as saying “Everyone interested in environmental integrity and financial transparency will celebrate the fact that President Dissanayake has delivered on his promise to defeat this conspiracy to defraud the people of Sri Lanka.”
“Personally, I am delighted by this decision. But it is not enough. The Government must now release all the related files to the Bribery Commission and request a full investigation as to how this scam was perpetrated in the first place. Who was the mastermind behind it? Remember, the last Government agreed to buy electricity from Adani at a rate that was 70% higher than the locally tendered price. Into whose pockets was that 70% going? It added up to billions of dollars,” he said.
Commenting on the culture shift brought about by the NPP Government, Pethiyagoda said: “The degree of transparency we are now seeing is unprecedented. There was no song and dance from the NPP about this hugely consequential Cabinet decision. Instead, the attorney general routinely filed it in court as part of a 174-page submission that reads like something out of Wikileaks. This is a huge victory for environmental and social justice. Much kudos to AKD.”
Pethiyagoda also told the Daily FT that by the same decision, the Cabinet has appointed a new Project Committee and Procurement Committee to make recommendations regarding Adani’s proposal, but that that committee would be constrained by the President’s election pledge to invite international bids for the project. “It could be that the President is under pressure to give this project to an Indian company,” he said, “in which case it is likely that bids will be restricted to companies incorporated in India. Then, Adani too can compete in an open and transparent manner.”
Adani is India’s renewable energy leader with significant capacity additions. The Adani Green Energy’s total operational renewable generation capacity to 11,608.9 MW, advancing its ambitious target of achieving 50 GW by 2030.
