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 But two Ministry sources told Reuters they were still reviewing the project and the power purchase deal had not been revoked.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.

Representational image only. File
| Photo Credit: Reuters

Sri Lanka’s new government led by Anura Kumara Dissanayake on Monday (October 14, 2024) told the Supreme Court that it would reconsider the approval granted by the previous government to India’s Adani Group for a wind power project.

A five-member Supreme Court (SC) Bench was told on behalf of the attorney general that the decision to review the project had been taken at a Cabinet meeting held on October 7. “The final decision of the new government would be conveyed after the installation of the new Cabinet after the November 14 Parliamentary election,” the court was told.

President Dissanayake in the run-up to the September 21 Presidential election had pledged that his National People’s Power (NPP) alliance would annul the project. The NPP claimed that the project posed a threat to Sri Lanka’s energy sector sovereignty and promised that it would be cancelled in the event of their victory.

Colombo mulls converting Adani power project to a G2G deal: Sri Lankan media 

The Adani Group was set to invest more than $440 million in the 20-year agreement for the development of 484 megawatts of wind power in the northeastern regions of Mannar and Pooneryn. The project faced fundamental rights litigation in the Supreme Court of Sri Lanka.

Petitioners have raised environmental concerns and lack of transparency in the bidding process to grant Adani Green Energy the go-ahead. Petitioners have also argued that the agreed tariff of $0.0826 per kWh would be a loss to Sri Lanka and should be lowered to $0.005 per kWh.