Adani Green Energy's Sri Lankan Project Under Scrutiny

Sri Lanka to renegotiate with Adani Green Energy a power purchase agreement
Renegotiation of the power purchase agreement the Sri Lankan government had entered into with Adani Green Energy shall ensure the cost per unit to be cheaper than USD 0.06 for a 484 MW wind power project.
The decision comes at a time when the previous government had agreed to buy the power at a cost of 8.2 cents per unit after local bidders offered lower prices.

Government's Decision to Renegotiate
The new government that commenced in December 2024 rejected the agreed-upon deal set by the former government of Sri Lanka for the year 2023. Instead, it said that it was willing to settle for an improved deal according to Sri Lanka's energy plan.

An entirely project review committee was constituted to bargain better pricing and terms in favor of the country. However, clarification was sought through the government; the projects on Mannar and Pooneryn with Adani Green Energy are not to be canceled but placed under scrutiny so that better terms can be assured.

Response of Adani
Adani Green Energy reignited interest in the Sri Lankan market. The firm asserted that reviewing the tariff approved on May 2024 was a standard process undertaken by any new government since it was decided by the cabinet on January 2, 2025. In Sri Lanka's renewable energy sector, Adani will invest USD 1 billion and aims to drive the country towards green energy transition.

Background of the Agreement
It was a power purchase agreement entered into by the previous administration at a fixed rate of 8.2 cents per unit for 20 years. Criticized it was, because reports of more advantageous offers, at lower-priced local bidders surfacing, even prompting calls for a review especially in the context of a newly-installed government.

This administration has moved forward with more balanced action since it is renegotiating rather than flatly annulling the project. Some political parties had questioned the Adani Green Energy agreement and even threatened to scrap it.

Impact on Sri Lanka's Energy Industry
The wind power project will also play an extremely crucial role in the achievement of renewable energy targets for Sri Lanka. Sri Lanka has been really working very hard to expand green energy infrastructure in the country and, by extension, break away from fossil fuel dependency and, by extension, reduce its overall energy costs. As the power purchase price might be cut, the cost of electricity for consumers and businesses would decrease.

This may also imply implications for the future foreign investments into Sri Lanka's energy sector. Should the government successfully renegotiate its lower tariffs with other international energy companies, it will set a precedent that will most likely be adopted in future agreements signed.

What's Next?
The government-appointed committee will study the project and present it to the people. There will be an analysis of which of the revised terms will be able to benefit Sri Lanka more, both financially and strategically. The response from Adani Green Energy was said to be willing to continue working with the government of Sri Lanka, showing that there will likely be an agreement regarding negotiations.

To some extent, the future of the 484 MW wind power project is dependent on whether the government will be able to secure a better purchase price without jeopardizing the investment and long-term energy plans of the country.