The Adani Group is going ahead with the construction of the West Container Terminal at the Colombo port, along with the Sri Lanka Ports Authority (SLPA) and conglomerate John Keells Holdings. File
| Photo Credit: Reuters

Adani Green on Wednesday (February 12, 2025) withdrew from a controversial renewable energy project in northern Sri Lanka, amid persisting controversy and a legal battle over its approval and potential environmental impact.

Also read: Under the scanner: Adani’s project in Sri Lanka | Explained

The move signals a significant retreat for the Adani Group from its investment outreach in India’s neighbourhood, in the wake of local scrutiny and criticism. The company’s withdrawal also amounts to a win for Sri Lanka’s President Anura Kumara Dissanayake, who vowed to cancel the “corrupt” project before being elected to the country’s top office in September 2024, although his government later expressed willingness to renegotiate it.

In a letter dated February 12, 2025, Adani Green said following the Government of Sri Lanka’s recent appointment of a committee to renegotiate the project, it decided to “respectfully withdraw from the said project”, while “fully respecting” the sovereign rights of Sri Lanka and its choices. Citing “protracted discussions” with the Ceylon Electricity Board for over two years, on the 484 MW renewable energy wind farms in the northern towns of Mannar and Pooneryn in Sri Lanka, the company said it the “build-own-operate” project had envisaged a total of investment of nearly $ 1 billion.

Meanwhile, the Adani Group is going ahead with the construction of the West Container Terminal at the Colombo port, along with the Sri Lanka Ports Authority (SLPA) and conglomerate John Keells Holdings.

Adani Green’s wind farm project in northern Sri Lanka has remained under the scanner from the time it was approved by the Gotabaya Rajapaksa administration in 2022, without a competitive tender process. The Ranil Wickremesinghe administration, too, took the project ahead, despite serious concerns raised by opposition — over the company’s “backdoor entry” into Sri Lanka’s energy sector, as well as Mannar residents and activists, who flagged potential damage to a key bird corridor, among other environmental risks, and moved the Supreme Court.

Wind turbines in Jaffna, Sri Lanka. Sri Lanka has revoked a power purchase deal with India’s Adani Group after a probe into U.S. allegations.
| Photo Credit: Getty Images

Sri Lanka has revoked a power purchase deal with India’s Adani Group after a probe into U.S. allegations that the conglomerate’s executives paid bribes to secure Indian power supply contracts, according to an AFP report published by the Economic Times newspaper on Friday (January 24, 2025).

Sri Lanka opened the probe into the Group’s local projects, the AFP reported, after U.S. authorities indicted billionaire Gautam Adani and other group executives in November on bribery and other charges, all of which the Group has denied.

While President Anura Kumara Dissanayake’s cabinet has revoked the 20-year deal power purchase deal signed in May 2024, it has not cancelled the project and has appointed a committee to review the project, the AFP reported, citing an official document and an Energy Ministry official.

Sri Lanka’s Power and Energy Ministry declined to comment. But two Ministry sources told Reuters they were still reviewing the project and the power purchase deal had not been revoked.

The Adani Group did not immediately respond to a request for comment.

The U.S. allegations had raised concerns among some partners and investors of the group, with at least one Indian State reviewing its power deal with Adani and TotalEnergies halting further investments in the conglomerate.

Overseas, Kenya has scrapped more than $2.5 billion in deals with the Adani Group, including contracts to develop an airport and build power transmission lines, after the U.S. indictment.

Under the power purchase deal, Adani Green Energy was to build two 484 megawatts wind power stations in the South Asian island nation’s northern province, with a total investment of $442 million. The company would be paid 8.26 cents per kilowatt-hour (kWh).

The cash-strapped country, which has suffered from crippling power blackouts and fuel shortages, has been trying to speed green power generation to hedge against surges in imported fuel costs.

The Adani Group is also involved in building a $700 million terminal project at Sri Lanka’s largest port in Colombo.

Adani Green Energy shares were trading 1% lower in Mumbai.