Sri Lanka cancels Adani Group's $440M power purchase deal
What's the story
Sri Lanka has canceled a power purchase agreement with Adani Group, amid corruption allegations against the company's founder, Gautam Adani. The decision was taken by President Anura Kumara Dissanayake's administration, which is now reviewing the proposed wind power project. Activists have also raised concerns over high electricity costs and possible environmental impact of this project. The proposed power project was estimated around $442 million.
Project review
Investigation into Adani's local projects
The Sri Lankan government has launched investigations into Adani Group's local projects, after corruption charges were leveled against Gautam Adani in the US last year. A senior official from the energy ministry confirmed President Dissanayake's cabinet had decided against going ahead with the agreement. However, he clarified that "the government has revoked the power purchase agreement, but the project is not canceled."
Project scrutiny
Adani's wind power project faces criticism and legal challenges
The deal with Adani Group, signed by the previous administration in May 2024, promised to buy electricity at $0.0826 per kilowatt from an unbuilt Adani wind power complex in northwest Sri Lanka. Activists have criticized the deal, arguing that smaller renewable projects provide electricity at two-thirds of Adani's price. The proposed construction of Adani's 484-megawatt wind power plant is also facing a Supreme Court challenge over environmental concerns.
Project reassessment
Sri Lankan cabinet to re-evaluate Adani's project
An official document seen by AFP confirmed that the Sri Lankan cabinet has decided to form a committee to "re-evaluate" the construction of Adani's project. The decision is in line with President Dissanayake's anti-corruption stance, who came to power in September promising to tackle corruption and recover stolen Sri Lankan assets allegedly hidden abroad. The current ruling party had also criticized the power purchase agreement in opposition.
Corruption allegations
Adani's corruption charges and group's response
Adani was charged in the US on November 19 for bribery and concealing these payments from US investors, New York prosecutors said. However, the Adani Group has dismissed the allegations as "baseless." The company has faced multiple corporate fraud allegations in the past few years that have rattled its diverse business empire from coal to airports, cement, and media.