Adani Green Energy Ltd.’s stock saw a 2% increase on Tuesday, rising above Rs 935 on the National Stock Exchange (NSE), following reports that the company will withdraw from its proposed wind power generation and transmission project in Sri Lanka. The decision to step back from the $442 million wind power project is seen as a potential resolution to the ongoing overhang about the project’s viability.
The withdrawal comes after Sri Lanka’s new government sought to renegotiate the terms of the power purchase agreement, primarily focusing on reducing the agreed-upon tariffs. According to a letter from Adani Green Energy seen by Bloomberg, the company confirmed that it would no longer move forward with its plans to develop two wind power projects in Mannar and Pooneryn.
The wind farm, originally valued at $442 million and with a planned capacity of 484 MW, was approved by Sri Lanka’s Board of Investment in early 2023. The agreement set the electricity tariff at 8.26 US cents per kWh for a duration of 20 years. However, the new administration, led by President Anura Kumara Dissanayake, has insisted on renegotiating the deal, seeking to lower the tariff to under 6 cents per unit, which would represent a significant reduction.
In a report last month, Sri Lanka’s government disclosed its intention to slash electricity prices for proposed wind power projects, including those involving Adani Green Energy. These renegotiation efforts follow a broader push to reduce energy costs, with cabinet spokesman Nalinda Jayatissa confirming that the government aimed to lower the tariff by at least 27%.
The news of the withdrawal comes after an earlier wave of reports in January 2025, when it was claimed that the Sri Lankan government had revoked Adani Green’s project. The Adani Group had strongly refuted these claims at the time, labeling them as “false and misleading.” Despite these denials, the Sri Lankan government remained firm in its stance, stating that it would not honor the original agreement.
Industry experts also weighed in on the situation, noting that the tariffs offered by Adani Green were considered higher than those submitted by local bidders. Aruna Kulatunga, President of the EOI Project Developers Association, which represents 47 companies evaluating energy project bids in Sri Lanka, mentioned that the tariff offered by Adani Green was seen as excessive in comparison to local offers.
The withdrawal marks a significant blow to Adani Green’s overseas ambitions, particularly in Sri Lanka, where the company had planned to expand its footprint in the renewable energy sector. The company’s stock has already suffered a significant decline, losing nearly half of its value in the past six months. Despite the latest surge, its current market capitalization stands at Rs 1.5 lakh crore.
This move also adds to a series of setbacks faced by the Adani Group in international markets. The conglomerate has encountered challenges in other regions, including Bangladesh, where unpaid dues became a source of tension, and Kenya, where proposed infrastructure projects were scrapped following a US bribery investigation into Gautam Adani.
