Adani Green Energy shares experienced a decline of 0.76%, closing at Rs 909.90 on the stock market. The dip in the company's stock price is primarily attributed to its decision to withdraw from its planned wind power projects in Sri Lanka, a move that followed negotiations with the Sri Lankan government over reducing electricity costs for the projects.
In an official statement, Adani Green Energy announced that its Board of Directors had decided to withdraw from the renewable energy wind project and two transmission projects in Sri Lanka. However, the company emphasized that it remains committed to the country and is open to future collaborations if the Sri Lankan government expresses interest.
Under the original agreement, Adani Green was set to develop two wind power projects in Mannar town and Pooneryn village, both located in Sri Lanka’s northern province. The total investment for these projects was estimated at $1 billion, with $442 million earmarked specifically for wind power generation and transmission infrastructure.
Sri Lanka’s Changing Stance on Renewable Energy Projects
The Sri Lankan government, currently focused on reducing energy costs and prioritizing local renewable energy projects, had engaged in discussions with Adani to negotiate a lower electricity price for the wind projects. The original agreement, finalized in May 2023, included a deal under which Sri Lanka would purchase electricity from an Adani wind power facility at a rate of $0.0826 per kilowatt-hour.
However, the project faced backlash from activists and energy experts, who argued that smaller, localized renewable energy projects could supply electricity at a much lower cost compared to Adani's pricing.
Sri Lanka’s push for affordable and sustainable energy solutions stems from its severe economic crisis in 2022, during which the country suffered from frequent power blackouts and acute fuel shortages. In response, the government has been aggressively prioritizing renewable energy initiatives to reduce its dependence on costly imported fuel and enhance energy security.
Adani’s Other Investments in Sri Lanka
Despite withdrawing from the wind power projects, Adani Group continues to expand its presence in Sri Lanka. The company is currently engaged in the construction of a $700 million terminal project at Colombo Port, which is Sri Lanka’s largest and most significant maritime trade hub.
This development underscores Adani’s strategic interest in Sri Lanka’s infrastructure and energy sectors, despite the setback with the wind power projects.
