Deciding not to go ahead with a 484 MW wind power project that Adani Green Energy SL Ltd was awarded in June 2024 under former Prime Minister Ranil Wickremesinghe's government and the Sri Lanka Cabinet of President Anura Kumara Dissanayake has raised concerns about pricing and transparency.
Adani Green Energy proposed a tariff of 8.26 cents per kilowatt-hour, more than double what local companies offered 4.88 cents per kilowatt-hour. Her critics asked why a 70% costlier bid was accepted when domestic options were available, but there were debates about accountability and financial prudence.
Environmentalists were concerned about the location of the project in the ecologically sensitive region of Mannar where it is located close to migratory bird habitats. The impact of the project on the environment was called into doubt by the Wildlife and Nature Protection Society and Environmental Foundation Ltd.
The Bishop of Mannar representing local communities expressed fears of disruptions to industries, livelihoods, and biodiversity. Opposition to the project fueled by such arguments continued to grow into opposition supported by environmental advocates who argued the project had failed to address the long-term ecology of the project.
Beyond environmental concerns, the economic issue of the deal drew significant criticism. Committing to Adani's proposed pricing would have meant pushing up the cost of electricity in Sri Lanka, which would have in turn put an extra financial bite on consumers. However, many critics wondered if corruption and corporate influence didn't play some part in the decision-making process.
When citizens called on their president to stand by his election promise of transparency and commitment to national interests, President Dissanayake reacted by announcing the suspension of the agreement. Economists and environmentalists gave the move a warm reception, saying it was a welcome first step toward reforming the country's energy procurement policies. The decision marked an opening to less of a monopolized and more of a competitive and fair energy sector that reduces corporate dominance and a more equally playing field for energy management.
After the power cancellation, the government set up a Project Committee and a Procurement Committee to administer the Wind power initiative. These committees must invite international bids that would be transparent and competitive.
The move may ease concerns about whether the new process will be completely impartial. Geopolitical factors still may have given Indian companies an edge, including Adani, some speculate. Environmentalists and those calling for financial accountability have pushed the government to make available all project-related files for investigation.
The cancellation of Sri Lanka's Adani project marks that Sri Lanka's energy infrastructure must be transparent and accountable. But, as the government carries on, local and international stakeholders will continue to keep a watching eye on how its actions continue.