Sri Lanka Cancels Power Purchase Agreement with Adani: Reports

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Posted by NewAdmin on 2025-02-04 08:45:30 |

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Sri Lanka Revokes Pricing Deal with Adani Group

The Sri Lankan government has revoked the pricing agreement for the Adani Group’s wind power projects in the Mannar and Pooneryn districts, raising uncertainty about the future of the 484 MW projects. The decision, however, does not involve canceling the projects outright. A committee has been formed to review the terms of the agreement, which was signed in May 2024 under the previous administration.

Criticism of the Original Agreement

The controversy stems from the 20-year power purchase agreement that set a tariff of USD 0.826 per unit for Adani’s wind projects. This tariff has faced criticism due to claims that local bidders offered lower unit prices for the same projects. The new government decided to revoke the pricing deal in light of these concerns, prompting a review of the contract’s terms and conditions.

Committee Review and Next Steps

Government spokesperson Nalinda Jayathissa clarified that the aim is not to cancel the projects but to reassess the pricing and make necessary adjustments. The committee tasked with reviewing the project has already begun its work, and once the review is complete, the government will determine the changes required to move forward.

Implications for the Adani Group

The move to revoke the pricing deal signals potential delays and revisions for the Adani Group’s wind energy ventures in Sri Lanka. The outcome of the review could have significant implications for the project's cost structure and its future viability in the region.

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