Cannot justify Adani’s ‘excessive tariff’, Sri Lanka’s President Dissanayake tells Parliament

Sri Lanka reacts to Adani Green's exit from renewable energy project, emphasizing competitive tariffs and transparency in energy investments.

Days after Adani Green announced quitting from a controversial renewable energy project in Sri Lanka, President Anura Kumara Dissanayake said awarding energy projects at an “excessive tariff” of $8.26 cents “cannot be justified”. While welcoming energy investments based on a competitive tariff, Sri Lanka will not privilege a specific company or country, he said on Monday (February 17, 2025), without naming Adani or India.

Mr. Dissanayake’s statement, made during his maiden Budget speech in Parliament, is Sri Lanka’s first official reaction to the company’s decision, conveyed to Sri Lanka’s Board of Investment in a letter dated February 12, 2025. Citing another project signed recently with a local company, Mr. Dissanayake said: “We awarded a tender to a 50MW wind power project at $4.65 cents for a unit of electricity. In that context, awarding projects at an excessive tariff around $8.26 cents cannot be justified.”

He further added: “To provide energy at a competitive cost to industries, exporters, and consumers, we will welcome energy investments based on the lowest tariff, and we will not provide preferential treatment [based] purely on the company or the country of origin.”

Meanwhile, Sri Lankan Foreign Minister Vijitha Herath also told The Hindu on Monday (February 17, 2025) that the withdrawal of Adani Green from the power project did not arise due to a change in government, but because of the “very high tariff” negotiated with the previous Wickremesinghe government. He emphasized, however, that the Adani group’s decision had come as a surprise to the Sri Lankan government, as it was still in the process of review at the time. 

“We had not taken any decision so far. This [withdrawal] was the decision of the [Adani] group company. I don’t know what is the reason behind their decision...they just sent an email to our Board of Investment. As a government, we have not discussed it yet,” said Mr. Herath, who was in Muscat for the 8th Indian Ocean Conference.

Sri Lanka’s leading business newspaper, the Daily Financial Times, said in its editorial on Monday: “Adani exit from renewable energy projects a victory for transparency”.

According to sources familiar with the project, “another big concern” for the Adani wind power project in Mannar and Pooneryn in northern Sri Lanka, is that at least five petitions on human rights, land rights, and environmental concerns are set to be heard by Sri Lankan courts this year.