Adani Energy’s $1 billion investment in Sri Lanka marks the country’s largest renewable energy project, enhancing sustainability and providing employment and energy security.
Adani Group plans to invest over $1 billion in setting up projects in Sri Lanka to generate electricity from wind. This would be Sri Lanka’s single largest foreign direct investment and the biggest power project.
India Power Media reported that Group firm Adani Green Energy Ltd will set up two wind farms in Sri Lanka’s Mannar Town and Pooneryn Village in the Northern Province, with a total installed capacity of 484 MW and an investment of about $740 million.
Over $290 million will be invested further in the infrastructure transmitting electricity to consumption centres. Last month, Sri Lanka agreed to buy electricity from Adani’s wind power stations for twenty years.
Adani Green Energy will be paid 8.26 cents per kilowatt hour per the agreement. This is lower than the 26.99 cents per kilowatt hour paid to Thermal Projects of state-owned CB and 9.67 to 13.99 cents per kilowatt hour for wind projects. It is lower than 8.75 cents per kilowatt hour paid to OD Mavadi Solar Projects.
Adani’s tariff is lower than the government’s wind power plant and the country’s fossil fuel-based power. The project contributes to Sri Lanka’s energy security, generating 1,500 million units of clean, renewable energy annually, meeting the energy demand of about 600,000 households. It creates over 1,200 local jobs, displaces fossil fuel worth USD 270 million annually, and reduces CO2 emissions by 1.06 million tonnes annually. As Sri Lanka is a fuel importer and currently faces an economic crisis, the project brings foreign direct investment and reduces the fossil fuel import bill.
Adani Group is involved in building a USD 700 million terminal project at Sri Lanka’s largest port in Colombo. Sri Lanka, which faced severe power blackouts and fuel shortages during an economic crisis in 2022, enacted new legislation to revamp its power sector and attract investment in renewable energy.
This move aligns with commitments made under a USD 2.9 billion aid from the International Monetary Fund (IMF). The new legislation aims to reduce losses in the state-run power company, Ceylon Electricity Board (CEB), and make the sector more appealing to investors.
The Sri Lankan cabinet approved Adani’s project, and a power purchase agreement (PPA) is being finalised.
The project follows the standard process of government floating a request for proposal (RFP), technical evaluation by the CEB’s Project Committee, and tariff negotiation by the Cabinet Appointed Negotiation Committee (CANC). It also received approval from the Public Utilities Commission of Sri Lanka (PUCSL).
