Sri Lanka (Commonwealth Union)_ Adani Green Energy, the renewable energy arm of the Gautam Adani-led conglomerate, has announced its decision to respectfully withdraw from a planned $1 billion wind energy project in Sri Lanka. This move comes despite the company having secured most of the necessary approvals for the 484-megawatt (MW) wind farm, which was slated to be developed across Mannar and Pooneryn in Sri Lanka. The withdrawal comes after a series of delays, with unresolved environmental clearance issues and a pending Supreme Court case proving significant obstacles. In a letter sent to Sri Lanka’s Board of Investment (BOI), Adani Green stated that while it has remained committed to the project, the ongoing challenges have made it difficult to move forward. However, the company emphasized that it remains open to future opportunities in Sri Lanka, expressing respect for the nation’s sovereignty and decision-making processes.
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The Adani wind project in Sri Lanka
The proposed wind energy project, with an installed capacity of 484 MW, was seen as a crucial step toward meeting Sri Lanka’s renewable energy targets. Sri Lanka has been pushing for increased investments in clean energy to reduce its dependence on fossil fuels. The project also represented a significant expansion of the Adani Group’s footprint in the country, following the group’s acquisition of a major infrastructure contract for the Western Container Terminal at Colombo Port in 2021. Gautam Adani, Chairman of the Adani Group, had visited Sri Lanka in 2021 to explore further investment opportunities, and it was during this time that discussions around the wind project began. By 2023, the Sri Lankan government approved the 484 MW wind farm project, with an agreement to supply power at a tariff of 8.26 cents per kilowatt-hour (kWh) for 20 years.
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However, the project quickly attracted criticism from various quarters. Opposition parties and local communities voiced concerns about the ecological impact of the wind farms in the region. Additionally, trade unions of the Ceylon Electricity Board (CEB) protested against the project, arguing that contracts should only be awarded after a transparent competitive bidding process. Protests and political unrest surrounding the project escalated, coinciding with the financial crisis that gripped Sri Lanka. In 2022, Gotabaya Rajapaksa was ousted as president amid widespread protests, and his successor, Ranil Wickremesinghe, oversaw the signing of the Power Purchase Agreement in 2024. However, with the election of Anura Kumara Dissanayake as President in September 2024, the wind energy project came under renewed scrutiny. Dissanayake had previously stated his opposition to the project, claiming it threatened Sri Lanka’s energy sovereignty. He made it clear that he would seek to cancel the agreement, leading to further uncertainty about the future of the wind farm.
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Delays and legal challenges
In January 2025, the Sri Lankan government appointed a committee to review the project and explore renegotiations. Government spokesperson Nalinda Jayathissa clarified that there were no immediate plans to cancel the Mannar and Pooneryn wind farm projects. Instead, the committee was tasked with assessing potential adjustments to the agreements in light of ongoing public and political concerns. Regulatory hurdles compounded the delays for Adani Green. Despite having completed 14 rounds of discussions with various Sri Lankan government committees, the project was stalled by the lack of environmental approval for Mannar and the ongoing legal case in the Supreme Court.
Environmental groups also questioned the project’s financial viability, challenging the power procurement terms in a public interest lawsuit. They argued that the tariff agreed upon would lead to losses for Sri Lanka and burden consumers. In its letter to the BOI, Adani Green noted that it had already spent around USD 5 million on pre-development activities, including land acquisition and the planning of a transmission system for the wind farms. The company expressed regret over the decision but confirmed its respect for Sri Lanka’s sovereignty. It added that it remained committed to exploring future development opportunities in the country.
Adani Green’s withdrawal
Adani Green’s withdrawal from the $1 billion wind energy project marks a setback in Sri Lanka’s pursuit of renewable energy expansion. Despite the challenges, the company’s open invitation for future cooperation underscores its long-term interest in the Sri Lankan market. As the nation continues to grapple with energy challenges and economic recovery, the outcome of the review committee’s work on the wind project will be closely watched. The decision also had minimal impact on Adani Green’s stock price. As of 12:30 pm on the day of the announcement, shares of Adani Green Energy were trading up 1.84% at Rs 933.95, reflecting the market’s indifference to the company’s decision. While the wind energy project in Sri Lanka has been shelved for now, Adani Green’s commitment to clean energy remains strong, and the company’s future in Sri Lanka may still hold potential as the nation navigates its renewable energy transition.
