Adani Project Cancellation SL set to Pay Rs. 300 - 500 Million to Adani

• Exact amount to be determined after consulting AG 
• Fresh tenders to be called for renewable energy projects in north
• Original agreement approved by previous government
• Adani withdrew citing pricing disagreements with NPP govt
• Projects were planned in Mannar and Pooneryn to generate 350 MW by 2025

By Kelum Bandara 

Sri Lanka is set to pay Rs.300-500 million to India’s Adani  Company for initial costs sustained by it in terms of the two  renewable energy projects, a top source said.   

India’s Adani Green Energy withdrew from the projects after  differences with the National People’s Power (NPP) government over  pricing. The company asked for reimbursement of the initial expenses it  incurred here for the execution of the project. The letter was sent in May this year announcing withdrawal from the project and seeking  reimbursement.   

Afterwards, the Sustainable Energy Authority of Sri Lanka,  upon request by the Energy Ministry, sought legal advice on whether  payments should be made as requested by the Indian company.   

The source said, on condition of anonymity, that legal  advice was received yesterday for reimbursements of some of the  expenses, and the total amount would be in the range of Rs.300 to 500  million. The Authority is firm that payment made by Adani for the  energy permit need not be reimbursed no matter what. However, the exact  amount of reimbursements would be determined after consultation with the  Attorney General and approval of the board of directors of the  Authority within the next few months.   

The company was to build wind power plant projects in the  Mannar and Pooneryn towns in the Northern Province, investing $442  million.   

The project was expected to add at least 350 MW to the  national grid by 2025. The company authorities sent a letter to the  government authorities in May this year asking for reimbursement of  expenses it made initially for research and investigation along with the  Sustainable Energy Authority (SEA) in Sri Lanka.   

The source said that the entire deal with Adani would be  closed after clearance of due reimbursements for fresh tenders to be  called for the same renewable energy projects in the north.   

“Adani can also participate in the tender process then,” the source said.   

Adani struck the deal for the projects with the previous government. The Cabinet approval had been given for them at that time.