Conglomerate founded by billionaire Gautam Adani says it withdrew from the projects as they were ‘financially unviable’.
The Indian conglomerate Adani Group has withdrawn from a troubled $442m wind power project in Sri Lanka after the island nation’s government sought to renegotiate the deal.
Sri Lanka’s Board of Investment (BOI) announced on Thursday it had received a letter from Adani Green Energy Limited saying it had decided to “respectfully withdraw” from the project, which involved building two wind power plants along with two transmission projects.
Sri Lanka’s new government has been reviewing the Adani projects after US authorities accused billionaire founder Gautam Adani and other executives in November of being part of a scheme to pay bribes to secure Indian power supply deals, charges the firm has denied.
Last month, the government said it had begun talks with the Adani Group to trim the cost of power in the projects from an earlier figure of $0.08 to about $0.06 or less per kilowatt-hour (kWh).
The project was signed under the interim President Ranil Wickremesinghe in May 2024.
An Adani spokesperson explained that the group withdrew from the projects as they were “financially unviable”.
“It was learned that another cabinet-appointed negotiations committee and project committee would be constituted to renegotiate the project proposal,” the company told the chairman of Sri Lanka’s investment board in a letter.
“This aspect was deliberated at the board … and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw,” it added in Wednesday’s letter, seen by the Reuters news agency.
In a statement on Thursday, Adani Green said it was still committed to Sri Lanka and was open to future collaboration if the government in Colombo desired.
The Adani Group is also involved in building a $700m terminal project at the country’s largest port in Colombo.
The US International Development Finance Corporation had initially pledged $553m for Adani’s West Container Terminal in Colombo but later pulled out.
Cash-strapped Sri Lanka, which suffered crippling power blackouts and fuel shortages during an economic crisis in 2022, has been trying to fast-track renewable energy projects to hedge against surges in imported fuel costs.
Adani was the first foreign investor to enter Sri Lanka in the wake of that financial crisis.