Recent statements surrounding the status of Adani Group’s ~500 MW wind power projects in Sri Lanka have sparked several discussions about the project’s future circulating in the public domain. Various interpretations of the Cabinet’s recent decisions haves necessitated official clarification from government authorities regarding the project’s status and future direction.
On January 23rd, following the circulation of an unofficial Cabinet document, media reports emerged suggesting the termination of the Adani Group’s wind power project. Adani Group subsequently issued an official statement refuting these reports and reaffirming commitment to a US$1 billion investment in Sri Lanka’s renewable energy sector. The company emphasized continued engagement with the project and dedication to developing green energy infrastructure in Sri Lanka
Government reaffirms project continuity
In an official statement issued on January 24th, Cabinet Spokesperson Minister Dr. Nalinda Jayatissa clarified that the Cabinet has not made any decision to terminate the 484 MW wind power projects in Mannar and Pooneryn. Dr. Jayatissa confirmed that the government will undertake a review of the existing agreement with Adani Group, focusing specifically on tariff structures and pricing mechanisms.
According to official documentation from the January 2, 2025, Cabinet meeting, the government has rescinded its previous decision of May 6, 2024, which had established a tariff rate of 8.26 cents/kWh for Adani’s 484 MW wind power facilities. The Cabinet has subsequently established a Project Committee and a Cabinet-Appointed Negotiation Committee to conduct a comprehensive reassessment of the proposal. It is noteworthy that the official documentation contains no reference to project termination.
Such reassessment procedures are standard administrative protocol, particularly during governmental transitions, to ensure alignment between existing agreements and current policy frameworks. The Cabinet documentation explicitly indicates that the primary objective is tariff renegotiation, necessitating the withdrawal of the previous tariff decision to facilitate the process.
The Cabinet’s directive clearly demonstrates that the focus is on reviewing and potentially revising the tariff structure rather than terminating the project. It represents a routine evaluation process within the framework of governmental procedure and policy review.
Strong foundation in project journey
The project’s history is documented through several key Cabinet papers, beginning with one dated 2016-12-13 signed by the then Secretary, Ministry of National Integration. This was followed by a Cabinet paper dated May 06 for Memorandum dated May 02 on investing $1.7 billion. Subsequently, Cabinet approval was granted for a Project Committee and Cabinet Appointed Negotiating Committee authorization for the development of 484MW wind power project in Mannar and Pooneryn.
Other notable Cabinet papers for the project include the one in March 2022 (CP No.22/0380/301/008), with the Cabinet approved entering into an MOU with Adani Green Energy Ltd, authorizing relevant parties to proceed with implementation. It was followed by an August 2023 decision (CP No.23/1546/621/063) to issue RfP to AGEL and establish a Cabinet Appointed Negotiation Committee (CANC) and Project Committee (PC). Further strengthening the project’s framework, a November 2023 Cabinet decision (No.65/2023/PE) approved the acquisition of government lands for the Pooneryn 234 MW wind power project on a lease basis.
However, the January 2, 2025 Cabinet decision does not explicitly address or revoke the previous Cabinet approvals pertaining to the project’s foundational framework, suggesting that these prior decisions remain valid, indicating that Adani Group retains its position as the designated project developer, with only the tariff structure subject to renegotiation under the Cabinet’s latest directive.
Leadership commitment and strategy
During his recent trip to India – President Anura Kumara Dissanayake has expressed clear support for the Adani Group’s involvement in Sri Lanka, stating, “We don’t have any concerns over how they work with other countries. What is important for us is how they work with us.” He emphasized that his ‘stable government’ intends to ‘pave the way’ for more Indian investments, focusing specifically on how companies perform within Sri Lanka’s development framework.
Energy Minister Kumara Jayakody had earlier also clarified that the recent Cabinet note was intended to review the project in alignment with the new government’s policies, emphasizing that no decision has been made to cancel the project. He added that it was primarily focused on tariff renegotiation rather than project revocation.
The Energy Ministry’s recent actions align with the position of a committee being appointed to review the project’s terms. “Our objective is to implement these agreements in a manner that is more beneficial for the energy sector and the people of the country—not to cancel them,” Minister Jayatissa emphasized.
Currently, five cases related to the proposed 484-megawatt wind power plants in Mannar and Pooneryn are before the courts. The government has stated it will make final decisions based on these legal outcomes while maintaining a commitment to the project’s framework.
In addition, the proposed 484-megawatt wind power plant in the Mannar and Pooneryn coastal areas currently faces Supreme Court challenges primarily concerning environmental considerations.
President Dissanayake has acknowledged these concerns while maintaining a balanced approach, stating that ‘environmental concerns are as important as investment for Sri Lanka.’ It reflects the government’s commitment to sustainable development while ensuring beneficial terms for the nation.
Strengthening bilateral cooperation and investment
Foreign Minister Vijitha Herath has confirmed that Indian officials remain open to discussions about the project, particularly regarding tariff considerations, demonstrating the collaborative spirit between both nations in advancing the significant energy initiative.
The development comes as part of the new government’s broader approach to foreign investment, with President Dissanayake emphasizing Sri Lanka’s focus on evaluating projects based on their merit and contribution to national development rather than external factors.
The government continues to emphasize that while the project terms are under review, the fundamental agreement with Adani Group remains intact, reflecting Sri Lanka’s commitment to maintaining strong investment relationships while ensuring optimal benefits for all citizens.
