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Sri Lanka has canceled a power purchase agreement with Indian billionaire Gautam Adani’s conglomerate after allegations of corruption in a US probe last year, AFP reported citing unnamed government officials.
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Published Jan 24, 2025 • 2 minute read
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Sri Lanka has canceled a power purchase agreement with Indian billionaire Gautam Adani’s conglomerate after allegations of corruption in a US probe last year, AFP reported citing unnamed government officials.
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While the Anura Kumara Dissanayake-led government has revoked the power purchase agreement signed by the previous administration, the project itself is not canceled, according to the news wire report published Friday. Adani Group’s wind power project will now be reviewed by a committee, it added.
The previous Sri Lankan government had in May 2024 agreed to buy electricity at 8.26 US cents per kilowatt from the Adani’s renewable energy complex that’s yet to be built in the island nation.
Dissanayake’s cabinet has decided not to proceed with this power purchase deal, the report said, in a bid to seek lower tariffs after activists claimed smaller renewable projects were selling electricity at much lower prices.
Representatives for the Adani Group as well as Sri Lanka’s energy ministry and electricity board did not immediately respond to a request for comments on the AFP story.
Adani Green Energy Ltd. and Adani Power Ltd. led declines among the conglomerate’s stocks after the AFP report. Adani Power fell as much as 2.5% in Mumbai during trading while Adani Green slipped as much as 2.2%.
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The policy move is the latest headache for the ports-to-power conglomerate as Adani, Asia’s second-richest man, and his nephew face a US Department of Justice probe for their role in a $250 million bribery scheme to secure solar energy projects in India. Adani Group has denied the US allegations.
The previous administration’s approval of electricity prices for Adani Green’s projects “was a problem,” Foreign Minister Vijitha Herath had told reporters in October, adding that the government would give the deal a fresh look after the parliamentary elections in November.
—With assistance from Anusha Ondaatjie and Asantha Sirimanne.
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