Sri Lanka set to Lose $ 1Bn FDI with Adani moving out

SL will lose an  FDI (Foreign Direct Investment) of US $ 1 billion

MoU to be signed during Modi’s visit on grid connectivity 

Can Sri Lanka achieve 70 per cent renewable energy target?

President AKD asserted that Govt. would not agree to tariff quoted by Adani

Both project company, Sri Lanka Govt. not ready to budge from their stands on tariffs

By Kelum Bandara 

Sri Lanka is set to lose US $ 1 billion in FDI since Adani  wind power project in Mannar is now uncertain with both the project  company and the Sri Lankan government remaining firm on tariff rates,  Daily Mirror learns.   

India-based Adani Group was selected to implement the 484  MW Wind and transmission projects by the previous government. The  then Cabinet gave approval to enter into five memoranda of understanding  (MoU). Adani quoted US $ 0.826 as its tariff per Kilowatt hour.  

The Indian Prime Minister will arrive in Sri Lanka on April  4 on a state visit. He will witness the signing of half a dozen of MoUs  covering areas such as defence, energy and digitisation

Ahead of the implementation of the project, the current  government which took office sought to review it and said that the unit  price quoted by Adani was too high. It led Adani Green Energy, the local  company of Indian billionaire Gautam Adani’s Adani Group’ to announce  its withdrawal from the project. Later, upon request by the Sri Lankan  government, the company said it remains open to cooperation with Sri  Lanka but is not prepared to alter the originally quoted tariff rates.  

In the meantime, the Sri Lankan government has firmed up  its position that it is not prepared to give the go –ahead for the  project at that rate. President Anura Kumara Dissanayake, at an  election, said that his government would not proceed with the project  with this tariff rate no matter what.  

A top government source said that the project is unlikely  to take off under the current circumstances because of disagreement on  tariff rates.   

If the project is not implemented, Sri Lanka will lose an  FDI (Foreign Direct Investment) of US $ 1 billion.  It will also  affect Sri Lanka’s target to achieve 70 per cent renewable energy  generation by 2030 and net zero by 2050. It will also deprive Sri  Lanka of transformative FDI.  

However, during the upcoming visit of Indian Prime Minister  Narendra Modi, Sri Lanka and India will sign a MoU to undertake a  feasibility study on the proposed interconnection of two power grids.   

“We will sign the MoU to carry out the feasibility study to  be completed in nine months. Based on that study, we will decide how to  proceed with the execution of the project. We need a proper business  plan,” a source said.   

The Indian Prime Minister will arrive in Sri Lanka on April  4 on a state visit. He will witness the signing of half a dozen of MoUs  covering areas such as defence, energy and digitisation.