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.
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.