Crisis-hit Sri Lanka has approved a $442-million wind power project of Adani Green Energy, barely a month since the Indian multinational conglomerate’s stocks plummeted following U.S.-based short-seller Hindenburg’s damaging report on the Group.
“Adani, a leading Indian company” received the project approval “to start two wind power plants in Mannar and Pooneryn areas of [northern] Sri Lanka,” the Board of Investment (BOI) of Sri Lanka said on Wednesday. The project would likely create 2,000 jobs, and in two years, generate about 350 MW of power, the Board said in a statement.
The BOI’s approval effectively takes the Adani Group’s total investments in the island nation over the $1 billion-mark. It has already committed to pumping in $700 million at a strategic port terminal in Colombo, and work on the West Container Terminal began in November 2022.
Sri Lankan authorities are yet to make any public remark on whether the Group’s crashing stocks, following the Hindenburg allegations, would impact its ambitious projects in the investment-starved island nation. While the recent report accused Adani companies of “brazen stock manipulation and accounting fraud scheme over the course of decades”, the Group has denied any wrongdoing.
Progress review meet
When contacted, Sri Lanka’s State Minister of Investment Promotion Dilum Amunugama said the fall in the Adani Group’s stocks “will not affect a company like them”. “As far as our government and our Ministry is concerned, we are keen on investments and will ensure they are in order. That is why we approved this project,” he told The Hindu on Thursday. Earlier, Sri Lanka’s Power and Energy Minister Kanchana Wijesekera held a “progress review” meeting with the visiting officials of the Adani Group on the renewable energy projects.
Last year, the Adani Group’s projects triggered controversy in Sri Lanka, with government critics raising questions over transparency and due process in clearing the projects. The Opposition accused the Group of making a “backdoor entry” into the country’s energy sector, and within months, Sri Lanka amended its energy laws to eliminate competitive bidding in the energy sector.
In a separate development at the time, a former Ceylon Electricity Board chairman resigned after his controversial remarks to a parliamentary panel — he subsequently withdrew them and resigned — that Prime Minister Narendra Modi had “pressured” then Sri Lankan President Gotabaya Rajapaksa to clear an Adani Group project in the island nation. Mr. Rajapaksa “vehemently denied” the claim.
Meanwhile, the signing of the renewable energy project comes amid a renewed push by India and Sri Lanka to link their energy grids, an idea that the neighbouring countries first mooted over a decade ago. Currently, Sri Lanka generates power totalling some 4,200 MW a year, and the annual demand for energy is estimated to increase by about 5% over the next two decades. Authorities have said they aim to add about 2,800 MW renewable energy into the national grid over the next three years.