LNP – Government, Adani likely to meet next week to re-discuss pulled out project in Sri Lanka

Hours after news broke out that Adani Green Energy, founded by Indian billionaire Gautam Adani, had decided to withdraw its wind energy project from Sri Lanka yesterday, the Daily Mirror learns that both the Indian side and Sri Lankan government had decided to go in for another set of discussions next week, signaling that the deal may not be entirely off.

Informed sources said that it is highly likely that both the Indian and Sri Lankan sides will meet behind closed doors next week to discuss concerns and see if a mutual decision can be reached to continue discussing the implementation of the wind energy project in Mannar and two other transmission projects in the country.

Sri Lanka and India have already held 14 rounds of discussions over the implementation of the project with the previous government, with the Indian side venting their frustration at the delay in seeking approvals.

However, when President Anura Kumara Dissanayake had visited New Delhi recently, he had informed the Indian officials that his government was willing to discuss the Adani project but the tariff rates quoted by the company had to be reduced. Both parties had then agreed to discuss the matter further.

However, with the process dragging further, Adani Green Energy Limited Company Secretary Pragnesh Darji in a letter to Board of Investment (BoI) Chairman, Arjuna Herath said that Adani Green had been under protracted discussions with CEB and various government departments since past more than two years, in respect of establishing 484MW Renewable Energy Wind Farms at Mannar and Pooneryn, Sri Lanka, along with its associated transmission system, as also additional 220KV and 400KV transmission network expansion to carry electrons to consumptive centres in the southern part of Sri Lanka.

The letter further said that Adani Green teams had several rounds of discussions with state appointed committees and after more than 14 rounds of discussions, approval was accorded on tariff, fixed for 20 years, for the Power Purchase Agreement.

It said that Adani Green also worked on all clearances and licenses, with the exception of Mannar Environmental approval and an associated Supreme Court case. The company said it had procured almost all clearances.

“It was learnt that another Cabinet appointed negotiations committee (CANC) and Project Committee (PC) would be constituted to renegotiate the project proposal. This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project,” Adani Green Energy said in its letter.

“As we bow out, we wish to reaffirm that we would always be available for the Sri Lankan Government to have us undertake any development opportunity, if it ever considers Adani Group to participate,” it concludes. “We wish to convey our best wishes and gratitude to Government of Sri Lanka for the opportunity of engagement,” the letter said.

Now with this letter being sent on Wednesday, yesterday morning the BoI plunged into chaos with the Finance Ministry seeing its contents only after it was leaked to the media.

The Daily Mirror learns that when a large scale foreign investment pulls out of the country, the Finance Ministry and the President must be informed first and only then will an official statement be released to the media.

The BoI have remained silent as to how this letter which was ‘extremely confidential’ leaked to the media while the government has called for an investigation to see who is responsible.

With the contents leaked to the Sri Lankan media, Adani Green Energy Limited, in an official statement said it had decided to withdraw from its wind energy project in Mannar and that Adani Green Energy had conveyed its board’s decision to Sri Lanka.

However, the group stated that they remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka desires.

While the Adani Green Energy is the second FDI to pull out of Sri Lanka within months followed by Australian giant United Petroleum who withdrew in December, the Daily Mirror learns that discussions with Adani for talks over the wind energy project may not be entirely over with both parties likely to meet next week.