By P.K.Balachandran
Colombo, January 24: The Sri Lankan Cabinet of Ministers chaired by President Anura Kumara Dissanayake has revoked a decision made by his predecessor Ranil Wickremesinghe in June last year, to award a 484 mw wind power plants in Mannar and Pooneryn in North Sri Lanka to Adani Green Energy SL Ltd (AGESL).
But it is noteworthy that the government has not shut the door to the Adanis. It has appointed a Procurement Committee to make recommendations regarding the Adani’s proposal. This could mean that the Adanis can submit an amended proposal if they are still interested in the project.
The original contract is currently in the Supreme Court with environmentalists, local citizens and professionals challenging it. The court’s decision was expected in March 2025.
But the government’s latest decision to cancel the contract and appoint a new committee to re-consider the contract means that the matter has been taken away from the court.
The Challenge
The project was challenged in political circles and the Supreme Court on multiple grounds, including the arbitrary and excessive price of US cents 8.26 per kilowatt hour at a time when local bidders were offering prices as low as 4.88 cents.
Many environmental organisations, including the Wildlife and Nature Protection Society and Environmental Foundation Ltd., opposed the project owing to deficiencies in the Environmental Impact Assessment (EIA) and because Mannar is a critical habitat for migratory birds.
The local community, represented by the Bishop of Mannar too, vehemently opposed the project because of the harm to local industries and livelihoods and had gone to court.
In the course of his election campaign, the present President pledged to cancel the deal and call for international tenders to develop wind power in Sri Lanka.
According to Daily FT, consistent with that pledge, on December 30 2024, the Cabinet decided “To revoke the cabinet decision dated 2024-05-06 numbered CP No. 24/0850/621/047 submitted by the then Minister of Power and Energy on the Proposal of Adani Green Energy SL Limited for the Development of 484 MW of Wind Power Plants in Mannar and Pooneryn.”
Biodiversity scientist Rohan Pethiyagoda, who for the last year fought tirelessly against the proposal award, told the Daily FT: “Everyone interested in environmental integrity and financial transparency will celebrate the fact that President Dissanayake has delivered on his promise to defeat this conspiracy to defraud the people of Sri Lanka.”
“Personally, I am delighted by this decision. But it is not enough. The Government must now release all the related files to the Bribery Commission and request a full investigation as to how this scam was perpetrated in the first place. Who was the mastermind behind it? Remember, the last Government agreed to buy electricity from Adani at a rate that was 70% higher than the locally tendered price. Into whose pockets was that 70% going? It added up to billions of dollars,” he said.
Commenting on the culture shift brought about by the NPP Government, Pethiyagoda said: “The degree of transparency we are now seeing is unprecedented. There was no song and dance from the NPP about this hugely consequential Cabinet decision. This is a huge victory for environmental and social justice. Much kudos to AKD.”
Pethiyagoda further said that at the same time, the Cabinet has appointed a new Project Committee and Procurement Committee to make recommendations regarding Adani’s proposal.
Explaining that, Pethiyagoda said: “It could be that the President is under pressure to give this project to an Indian company. In which case it is likely that bids will be restricted to companies incorporated in India. Then, Adani too can compete in an open and transparent manner.”
Background
In May 2024, the Sri Lankan Power Minister Kanchana Wijesekara announced that the cabinet had green-lighted a 20- year power purchase agreement with Adani Green Energy for the development of 484 MW wind power stations in Mannar & Poonaryn in North Sri Lanka. The negotiated tariff rate was US$ 0.0826 per kWh. The cost of energy would be LKR 24.78 per kWh. The Minister further sair that the average cost of energy in Sri Lanka was Rs 39.02 per kWh. Adani Green Energy (AGEL) was spend US$ 442 million in the two wind farms in Mannar and Pooneryn .
The projects had been approved in February 2023. But by June Sri Lankan environmentalists were up in arms against them. The Bishop of the Diocese of Mannar, along with three prominent environmentalists, filed a public interest litigation in the Sri Lankan Supreme Court.
The petition challenged the procurement process, in addition to raising concerns about the credibility of the project’s Environmental Impact Assessment (EIA), and the characterization of the project as a government-to-government deal, which was to facilitate the entry of the Adanis who had influence over the Indian government and the Sri Lanka government via Indian Prime Minister Narendra Modi.
The petition challenged the basis for the negotiated tariff. It argued that the tariff of US$ 0.0826, or 8.26 cents per kilowatt-hour (kWh) for 20 years would lead to financial losses for Sri Lanka and burden consumers.
It was reported that a Technical Evaluation Committee appointed by Sri Lanka to negotiate the Adani project had recommended to the government that a unit of electricity should be bought for US$ 0.05 per kWh. Independent Sri Lankan energy experts had pointed out that Adani was selling power to the Indian states at less than US$ 0.04 per kWh.
The petitioners also said that despite the project’s national importance, New Delhi and Colombo had not made all the relevant data available for public scrutiny. The petition requested the Court to order the release of all files and records, including bids for the Mannar and proposed 234 MW Pooneryn plants; deliberations and negotiations; Cabinet decisions; unit price discussions; and criteria for project assessments.
The petition alleged that like most EIA reports on major projects in the past decade, the EIA on the Mannar wind power project was a mere eyewash. The EIA was manipulated to award the project to Adani, it says. The petitioners also wondered why the Power and Energy Minister acted as the project’s approving authority when there was a designated body — the Ceylon Environment Authority — for such tasks.
There was no transparency regarding the lease of 202 hectares on Mannar Island for the project, nor information on compensation for affected landowners. The EIA also did not adequately evaluate alternative sites — Ambewela, the South East coast, Kalpitiya, and Jaffna — or provide a rationale for choosing Mannar Island.
Environmental Issues
The petition emphasized the importance of Mannar Island as a focal point of the Central Asian Flyway, making it crucial for conservation and tourism. In March this year, Prof. Sampath S. Seneviratne of the University of Colombo’s Department of Zoology and Environment Sciences told The Island that around 15 million birds migrate to Sri Lanka from 30 countries each year.
“We are going to establish 52 windmills that have 96-metre rotor blades that rotate at about 100 km per hour in the path of these birds,” he said.
The petitioners sought a declaration from the Supreme Court that their fundamental rights and those of the citizenry had been violated and that the decisions to award the project to Adani were wrongful and should be declared illegal. The petition aimed to further the national interest by preserving and protecting public property, the environment, flora and fauna, public finances, and the rights and freedoms of the general public and future generations of Sri Lanka.
However, the choice of Mannar and Pooneryn as sites for the wind power project did not rest with the Adanis. The choice was apparently made by India taking into account its geo-political interests. India was keen on a non-military presence in North Sri Lanka especially the Mannar and Pooneryn area, the nearest to the Indian shores. India did not want China to have any presence there.
When a Chinese company got a wind power project in some offshore islands there, India protested and had it cancelled. China was sore about this because that project had been approved by the Asian Development Bank (ADB). China has since been complaining about the undue foreign influence over the Sri Lankan government’s decisions. It has repeatedly urged Sri Lanka not to abridge its sovereignty in this manner. But Sri lanka is not in a position to challenge India’s security interests.
In June 2022, M.M.C. Ferdinando, chairman of the state-run Ceylon Electricity Board, informed Parliament’s Committee on Public Enterprises, that the Sri Lankan government had faced pressure from Indian Prime Minister Modi to award renewable energy project tenders to the Adani Group.
Professionals’ Protest Letter
On the eve of President Anura Kumara Dissanayake’s State Visit to India, a group of professionals and university dons had asked him to cancel Adani’s wind power projects in the country in fulfilment of his election promise to “safeguard Sri Lanka’s energy sovereignty”.
Dissanayake was in India from December 15 to 17.
As per the Open Letter, in March 2022, the then Lankan government headed by Ranil Wickremesinghe had agreed to buy power at US cents 8.26 per kWh, whereas the purchase price for a kWh unit offered by local companies generated from much smaller wind power projects was half that price.
The letter pointed out that even Adani Green Energy’s Application for “Approval of an Investment” dated 18.01.2022 submitted to the Board of Investment, had quoted the price as US cents 6.50 per kWh, which was much lower than what the Cabinet of Ministers had approved.
The letter further said that Saudi Arabia had signed an agreement with a Japanese consortium to purchase wind power at a cost of US cents 1.56558 per kWh unit, while a second agreement was reached at the price of US cents 1.70187 per kWh.
“A comparison of these global prices with the price offered by the Adani Green Energy to Sri Lanka, US cents 8.26, leaves no room for doubt of the disingenuous nature of the project and possible corruption involved,” the letter said.
Lopsided Agreement
The letter further said that documents submitted by different Sri Lankan government agencies in the court cases filed against the contract, clearly pointed to a “shockingly one-sided economic benefit to Adani Green Energy from the proposed project and at a severe disadvantage to Sri Lanka”.
As per the 2022 cabinet decision, all imports, including the wind turbines and all other material required for building the wind farm would be exempt from applicable taxes such as import duty, VAT etc. The Lankan government would be required to develop the transmission evacuation infrastructure at its own cost, or pay Adani Green Energy the cost of such development.
The earnings of Adani Green Energy from the wind farm will be fully exempt from Income Tax. The government would be required to provide the ‘Adani Green Energy’ security for the above payments under the Power Purchase Agreement (PPA), with an International Letter of Credit duly backed by a Sovereign Guarantee of the Government of Sri Lanka.
Adani Green Energy would be free to repatriate such tax-free earnings generated in Sri Lanka back to India without any exchange control constrains or any tax deductions. “In essence, the Government of Sri Lanka will not generate any income for itself from Adani Green Energy’s commercial activity in Sri Lanka,” the letter said.
The Environment Impact Assessment (EIA) report had identified three other locations – ‘Kalpitiya Peninsula’, ‘Ambewela Cattle Farm’ and the South East Coast as being more suitable locations for building and operation of a windfarm, over and above the Mannar Island. However, most shockingly, the EIA itself arbitrarily made a completely different final decision, recommending Mannar Island, without any factual evidence, the citizens’ letter said.
“Thus, the irresistible inference is that Mannar Island has been selected notwithstanding the grave and irreparable damage it will cause to Sri Lanka, singularly due to its proximity to India, as opposed to the other more suitable locations,” the letter alleged.
Energy Sovereignty
The letter quoted an EIA report saying that the Mannar wind power project will control “around 6%” of the annual energy requirement of the country. This, the citizen’s letter said, would severely compromise the “Energy Sovereignty” of Sri Lanka.
“The said documents also show that Adani Green Energy will also build a further 5 GW wind power plant in the north Sri Lanka to generate electricity and export to India. In addition, there is a further intention to establish a floating solar and wind facilities in the territorial waters of Sri Lanka, bordering northern province”.
The citizens’ letter also said that the “Adani Group aims to create a monopoly in the Mannar North Wind Production in their favour, and their bid, planned capital investment and pricing, are developed to support towards such intent being delivered. The Public Utility Commission of Sri Lanka (PUCSL) has strongly opposed the deal.”
Seabed Exploration
The letter drew attention to the Adani Group’s proposal for “sea bed exploration in Sri Lankan waters” in the Mannar sea basin for valuable minerals in Sri Lanka’s Ocean bed.
In addition to the above, there is also a proposal to build a bridge connecting India to the Mannar Islands across the ‘Adams Bridge’ in addition an ‘Energy Highway’ between the two countries.
“Thus, it cannot be overstated that the implementation of the above proposed projects will place the North and North-Western territory of Sri Lanka and the adjacent territorial seas belonging to Sri Lanka, under the control of India, which will severely compromise not only the Energy Sovereignty of Sri Lanka, but most alarmingly, the territorial integrity of the country,” the citizens’ letter warned.
“The indecent haste with which the former Government had pursued the proposed project is fully reflected by the quick acquisition of private lands in the area for the proposed Project, even before the EIA was published, and in complete disregard of the objections of the people affected by the process,” the letter said.
Election Pledge
The letter to the President emphasised that the President should implement his election promise to cancel the project.
“Excellency, your citizens have elected you and given you the mandate to implement your manifesto. So, we respectfully ask you to honour that promise and not to proceed with the ‘Adani’ wind power project in Mannar,” the letter said.
“Sri Lanka is not alone in re-evaluating its partnerships with the Adani Group. Kenya recently cancelled multi-billion-dollar deals involving Adani, and an energy project in Bangladesh is under judicial inquiry”,” the letter added.
END
