India’s Adani Group has decided to withdraw from its wind power projects in Sri Lanka valued at $440 million. This decision comes after the newly formed government in Colombo initiated a review of the agreed tariffs for the projects.
The Adani Group, led by billionaire Gautam Adani, informed the government of Prime Minister Anura Kumara Dissanayake that its unit, Adani Green Energy, would be stepping back due to the Sri Lankan government’s intention to renegotiate the projects and reassess a 20-year tariff agreement.
In a letter sent on Wednesday, Adani stated, “It was decided that while the company fully respects the sovereign rights of Sri Lanka … it would respectfully withdraw.” The company mentioned it had already invested around $5 million on preliminary activities related to the two wind farms.
Earlier, Adani had warned that if the Sri Lankan government did not finalize new and reasonable tariffs by the end of March, it would pull out of the 484-megawatt projects. Adani Green Energy confirmed the withdrawal in a statement on Thursday, but there has been no immediate feedback from the Sri Lankan authorities.
This development follows similar actions by both Sri Lanka and Bangladesh, where governments are reevaluating power projects previously signed with Adani. In Bangladesh, the current government is reviewing several energy deals made by the former Sheikh Hasina administration, including an agreement for a coal-fired power plant that supplies electricity from India.
Adani has reportedly reduced the flow of electricity from the Godda power plant to Bangladesh since November due to disputes over overdue payments. People familiar with the situation suggest that Bangladesh owes Adani approximately $800 million but claims the outstanding amount is around $550 million.
Furthermore, the Adani Group has encountered other challenges recently. The U.S. Department of Justice and Securities and Exchange Commission have charged several executives, including the chair, in connection with a bribery scheme related to solar power contracts in India. Adani has labeled these allegations as unfounded.
In addition to the issues in Sri Lanka, the group also faced the cancellation of proposed deals in Kenya worth $2.6 billion, which included expanding a major airport and investing in power infrastructure. Following the U.S. accusations, Adani withdrew from a $500 million loan agreement to support a port project in Colombo, opting to fund it internally instead.
Despite these challenges in its energy projects in Sri Lanka, sources indicate that Adani will continue to pursue the port project.