Adani Green Energy secures a 20-year PPA with Sri Lanka for major wind projects.

Adani Green Energy Limited (AGEL), an Adani Group subsidiary, has signed a significant 20-year power purchase agreement (PPA) with Sri Lanka for the development of two wind projects, demonstrating the company’s commitment to renewable energy. The Sri Lankan government has finalised an agreement for projects with a total capacity of 484 megawatts (MW) in Mannar and Pooneryn, marking a significant milestone in Sri Lanka’s renewable energy sector.

The wind projects are Sri Lanka’s largest foreign direct investment and the country’s greatest power project to date. Adani Green will receive a competitive tariff of $0.0826 per kilowatt hour (kWh) for the electricity it produces, which is much lower than what the state-owned Ceylon Electricity Board (CEB) pays to thermal projects. The overall investment for these projects is anticipated at $740 million, with an additional $290 million set aside for related infrastructure to transmit electricity throughout Sri Lanka.

Adani’s entry into Sri Lanka comes after its involvement in the West Container Terminal project at Colombo Port, underscoring the conglomerate’s strategic interest in the region. In April 2024, Adani Green unveiled a major growth plan that includes an investment of Rs 2.3 trillion ($27.6 billion) to increase its solar and wind power output capacity to 45 GW by 2030, up from the existing 10.9 GW. This proposal comprises Rs 50 billion for renewable projects across India.

The start of operations at a 551 MW solar power plant in Khavda, Gujarat, demonstrates Adani Green’s commitment to renewable energy. The plant is currently producing power for the national grid, and the business plans to develop Khavda into the world’s largest solar park, with a capacity of 30 GW.

Sri Lanka, which experienced significant power outages and fuel shortages during its economic crisis in 2022, has passed new legislation to reform its power industry and encourage investments in alternative energy sources. This action is consistent with commitments made in a $2.9 billion rescue package from the International Monetary Fund (IMF) to reduce CEB losses and make the industry more appealing to investors.

Adani’s projects are strategically vital because they help counter China’s economic dominance in the Indian Ocean, namely in Sri Lanka’s northern region, which is adjacent to India’s southern mainland. The projects are intended to improve Sri Lanka’s energy security by generating around 1,500 million units of clean, renewable energy per year, which would cover the energy needs of approximately 600,000 homes. In addition, they will provide over 1,200 local job opportunities, replace fossil fuel imports worth $270 million per year, and reduce metricnby 1.16emissions metric tonnesric.

Despite some opposition from an anti-India movement apparently supported by China and fossil fuel suppliers, sources close to the project claim that all environmental standards were followed, including a full Environmental Impact Assessment (EIA) conducted by an independent third-party expert. Adani was granted the project via a transparent process that included a government Request for Proposal (RFP), technical examination, and tariff negotiations.

Adani’s wind projects are a watershed moment in Sri Lanka’s transition to renewable energy and economic stability, thanks to regulatory approval from the Public Utilities Commission of Sri Lanka (PUCSL) and a competitive rate.