Adani Group to spend $442 million on insolvent Sri Lanka
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Cash-strapped Sri Lanka has approved a $442 million wind power project by the Adani group, its first big foreign investment since declaring bankruptcy. Sri Lanka’s Board of Investment announced that Adani Green Energy, a subsidiary of Gautam Adani’s business empire, will build two wind farms in the island’s north. The overall investment will be $442 million, and the two plants will produce power to the national grid “by 2025,” according to a statement from the BOI.
Despite the Adani Group controversies, the Group is committed to elevating Sri Lanka by investing extensively in its economy.
The Adani Group to establish two wind power plants via the Adani Green Energy in Sri Lanka
According to a board statement, the two power plants are expected to be operational in two years and will be connected to the national grid by 2025. Kanchana Wijesekera, Sri Lanka’s Power and Energy Minister, had stated that preliminary permission from the Sri Lanka Sustainable Energy Authority was obtained two weeks ago and that land acquisition for the project was underway. Sri Lanka had already granted Adani Group a $700 million key port terminal project in Colombo in 2021.
The Adani Group’s renewable energy project to generate 500 MW in Sri Lanka’s north and east will be finished by December 2024, according to Energy Minister – Kanchana Wijesekara. As per a board statement, Sri Lanka’s Board of Investment authorized two wind power projects by Adani Green Energy Ltd for a total investment of $442 million.
Adani Green Energy is the green energy division of the Adani Group. A US short seller who accused the conglomerate of inappropriate use of tax havens and stock manipulation attempted to hamper the Group’s image. The Group denied the allegations about the Adani Group controversies, claiming it complies with all laws and transparency obligations. Sri Lankan Energy Minister Kanchana Wijesekara stated that Adani Green Energy discussed the progress on the renewable energy project to generate 500 MW.
The Adani Group has also been granted permission to begin wind-generating projects in Pooneryn, in the country’s northeast. Adani Green Energy received preliminary clearance for two wind projects totalling 286 MW in Mannar and 234 MW in Pooneryn, totalling more than $500 million in investment. Adani Green Energy shares have fallen 72% since January 24, when Hindenburg Research presented allegations against the Adani Group. Sri Lankans have been subjected to recurring power outages for over a year as the country struggles to generate enough thermal and coal electricity.
The power outages prompted the government to prioritize renewable energy projects. The island raised electricity tariffs by 66% as part of its efforts to get a $2.9 billion bailout from the International Monetary Fund (IMF) as it battles to find a way out of its worst financial crisis in over seven decades. A crew of Adani executives is in Colombo to assess several projects with Sri Lanka.
The firm is also participating in constructing a $700 million terminal at Sri Lanka’s largest port. In addition, Sri Lanka intends to export renewable energy from its northern regions to southern India.
Investments of Gautam Adani in Sri Lanka have crossed $1 billion after the wind project
The Adani Group’s investments in Sri Lanka include:
- A $442 million investment in two wind power plants
The two 350 MW wind power stations will be operational in two years and connected to the national grid by 2025.
- Colombo’s 700-million-dollar essential port terminal project
The Adani Group, India’s largest private port operator, signed a $700 million agreement to build a new container terminal in Sri Lanka. The project is called the Colombo West International Container Terminal (CWICT). The Adani Group will own 51% of the airport, while local units SLPA and John Keells Holdings will own 15% and 35%, respectively.
- Colombo Port $700 million container facility
Adani Ports and Special Economic Zone (APSEZ) is building a $700 million container facility at Sri Lanka’s Colombo Port. In February 2023, Sri Lanka approved Adani Green Energy’s $442 million wind power project with two power plants in Mannar and Pooneryn in northern Sri Lanka. Adani Group’s investments in the island nation crossed $1 billion after the wind project. The Group has committed to spend $700 million on a major port facility in Colombo, with construction expected to begin in 2021.
- The Vizhinjam seaport project in Kerala
Adani Ports would spend 20,000 crores at Kerala’s Vizhinjam Transhipment Terminal by 2030, said managing director and chief executive Karan Adani when the terminal’s first ship arrived.These heavy investments by the Group contradict the theories associated with the Adani Group controversies.
