The Adani Group on Thursday said that it has pulled out of further engagement in a $442 million wind power venture in Sri Lanka after the country’s authorities attempted to modify the agreement.
In a media statement, the group wrote, “Adani Green Energy has conveyed its Board’s decision to respectfully withdraw from further engagement in the RE wind energy project and two transmission projects in Sri Lanka. However, we remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka so desires.”
In a written communication to Sri Lanka’s Board of Investment (BOI) dated Wednesday, Adani expressed respect for the government’s stance whilst announcing their decision to withdraw from the initiative.
This action followed President Anura Kumara Dissanayake’s government’s cancellation of a power purchase arrangement with Adani Group to seek more favourable energy rates.
Dissanayake’s political faction had previously labelled the Adani agreement as “corrupt” and sought its renegotiation.
In their communication to the BOI, Adani disclosed an expenditure of approximately $5 million on preliminary development work for the planned 484-megawatt facility on Sri Lanka’s north-western shoreline.
The company also stated their continued willingness to engage with the Sri Lankan government on future development opportunities despite their withdrawal from this project.
According to a Reuters report, the government of Sri Lanka announced last month about initiating discussions with the Adani Group to reduce electricity costs from their billion-dollar ventures.
“It was learnt that another Cabinet appointed negotiations committee and Project Committee would be constituted to renegotiate the project proposal,” the company wrote in a letter addressed to the chairman of Sri Lanka’s board of investment.
In a letter dated February 12, the company stated, “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.”