President Anura Kumara Dissanayake’s government has scrapped a controversial power deal with Adani Group, citing concerns over pricing and corruption. Activists and legal challenges had long opposed the project.
BY PC Bureau
Amid reports that Sri Lanka’s government, led by President Anura Kumara Dissanayake, had revoked its power purchase agreement with Adani Group, the Indian conglomerate has dismissed such claims as “false and misleading.”
“Reports that Adani’s 484 MW wind power projects in Mannar and Pooneryn have been cancelled are inaccurate. We categorically state that the project has not been cancelled,” Adani Group said in an official press statement.
The company further clarified that the Sri Lankan Cabinet’s decision on January 2, 2025, to re-evaluate the tariff approved in May 2024 was part of a standard review process. “Such reviews are common with a new government to ensure alignment with its priorities and energy policies,” the statement added.
However, Sri Lankan government sources suggest the situation is more complex than Adani claims. An official from the energy ministry, speaking to AFP on condition of anonymity, confirmed: “The power purchase agreement has been revoked, but the project itself is not cancelled. A committee has been formed to review the entire project.”
Reports from Colombo indicate that Sri Lanka’s decision to scrap the power purchase agreement follows corruption allegations against Adani Group. President Dissanayake’s administration launched investigations into the company’s local projects after its billionaire founder, Gautam Adani, was charged with bribery in the United States in late 2024.
The agreement, originally signed in May 2024, had committed Sri Lanka to purchase electricity from Adani’s $442 million wind power project at $0.0826 per kilowatt. However, critics argued that smaller renewable energy firms were offering significantly lower prices. Additionally, Adani’s proposed wind farms in Mannar and Pooneryn are facing a Supreme Court challenge over environmental concerns.
JAGAN ANNA @ysjagan kathaa lo maro bhariii vijayam 😂😂😂😂😂
ADANI – SRILANKA ,1 billion $ deal CANCELLED due to Jagan corruption charges
Note : MODI ji ki Indulo em sambandam ledu 😁😁😁 pic.twitter.com/MxKaFuGac8
— 𝘚𝘸𝘦𝘵𝘩𝘢 𝘊𝘩𝘰𝘸𝘥𝘢𝘳𝘺 🎀 (@vibeofswetha) January 24, 2025
An official government document reviewed by AFP confirms that Sri Lanka’s cabinet decided to withdraw from the power purchase agreement while appointing a panel to reassess the project. The ruling party, while in opposition, had strongly opposed the Adani deal.
Dissanayake, who took office in September 2024, has vowed to fight corruption and recover Sri Lankan assets allegedly stashed abroad.
Meanwhile, Gautam Adani was indicted in the U.S. on November 19, accused of bribery and concealing payments from American investors, according to New York prosecutors. Adani Group has denied all allegations, calling them “baseless.”
ALSO READ: Adani’s Global Woes Escalate: After Kenya and Bangladesh, Sri Lanka Now in the Spotlight
With business interests spanning coal, airports, cement, and media, Adani Group has been embroiled in multiple corporate fraud allegations in recent years. The company was Sri Lanka’s first major foreign investor following its 2022 financial crisis, but its wind power project remains stalled amid legal and political challenges.
Adani-Sri Lanka Power Deal Controversy: Key Points
| Issue | Details |
|---|---|
| Power Purchase Agreement | In May 2024, Sri Lanka’s previous government agreed to buy electricity at $0.0826 per kilowatt from Adani’s proposed 484 MW wind power project in Mannar and Pooneryn. |
| Corruption Allegations | Adani Group’s founder, Gautam Adani, was charged with bribery in the U.S. in November 2024. Sri Lanka’s new government, led by President Anura Kumara Dissanayake, launched investigations into Adani’s local projects. |
| Opposition to the Deal | Activists and energy experts challenged the agreement, arguing that smaller renewable energy firms were offering electricity at two-thirds of Adani’s price. |
| Environmental Concerns | The project faced a Supreme Court challenge over potential environmental damage in coastal regions of Mannar and Pooneryn. |
| Sri Lanka’s Decision | In January 2025, Sri Lanka’s new cabinet revoked the power purchase agreement, but the wind power project itself remains under review by a special committee. |
| Political Backlash | The ruling party had criticized the deal while in opposition and is now conducting a broader review of foreign investments. |
| Adani Group’s Response | The company has dismissed all allegations as “baseless”, insisting that the project is crucial for Sri Lanka’s renewable energy goals. |
