India’s Adani Green Energy pulls out of Sri Lanka wind power deal, demands millions in compensation following government decision to renegotiate tariffs under NPP rule. Legal review underway.
India’s Adani Green Energy has formally requested the Sri Lankan government to reimburse millions of U.S. dollars after cancelling two proposed renewable energy projects. The projects, which were originally agreed upon under the previous administration, were scrapped by the new National People’s Power (NPP) government following concerns over the cost of electricity generation.
The wind power initiatives, valued at $442 million, were set to be developed in Mannar and Pooneryn in Sri Lanka’s Northern Province. The project aimed to contribute 350 MW to the national grid by 2025, offering a significant boost to the country’s renewable energy capacity.
However, the newly installed government reviewed the power purchase agreement and deemed the previously negotiated rates too high. As a result, Adani Green Energy opted to withdraw from the venture.
In May, the company submitted an official letter to Sri Lankan authorities seeking reimbursement for their initial investments. These expenses reportedly include collaborative research and feasibility studies conducted with Sri Lanka’s Sustainable Energy Authority (SEA), and a US $3 million payment already made to the SEA.
While Adani has not yet disclosed the total amount requested, the figure is expected to run into several million dollars. The Sri Lankan Ministry of Power and Energy has not made a final decision on the reimbursement and has stated that legal counsel will be obtained before proceeding.
“If there is any payment, it will be done only through Cabinet approval,” a senior official confirmed.
The dispute underscores growing tensions between Sri Lanka’s drive for affordable clean energy and the contractual legacies inherited from previous governments. As energy prices remain a politically sensitive topic, the outcome of this case could set a precedent for how future foreign investments in Sri Lanka’s energy sector are managed.
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