Adani Group withdraws from mega-wind projects in Sri Lanka
Signed with then President Wickremesinghe last May, the agreement included the construction of two wind farms on Mannar Island and in the village of Pooneryn. The Dissanayake administration has pulled the plug on the project to cut costs amid the country’s ongoing economic crisis and after fraud accusations were made against the Indian billionaire. Environmentalists are happy since the project threatened fishermen and migratory birds.
Colombo (AsiaNews) – Adani Green Energy Limited has informed the Board of Investment of Sri Lanka (BOI) of its decision to “respectfully withdraw” from a project to build two wind farms in the country. The BOI was set up to promote investments in the South Asian country.
Last May, the renewable energy arm of the Indian multinational conglomerate Adani Group signed an agreement with then interim President Ranil Wickremesinghe to build two wind plants with transmission facilities on Mannar Island and the village of Pooneryn for an investment of US4 442 million.
The step back came after the government began talks with the Adani Group in January to cut energy costs per kilowatt-hour (kWh) from US$ 0.08 to about US$ 0.06 or less. According to a spokesperson for Adani, the group was pulling out because the projects are “unviable financially”.
"This matter was discussed at the board ... and it was determined that, while the company completely honors the sovereign rights and decisions of Sri Lanka, it would graciously withdraw," the Group stated in a letter sent to the BOI this week.
The latter goes on to say that the Group is still present in the country, and remains available for future collaborations if the government so wishes.
The Adani Group is in fact involved in a US$ 700 million port terminal project at the country's largest port in Colombo.
President Anura Kumara Dissanayake's new government re-examined plans with the multinational after US authorities accused the Group’s founder, billionaire Gautam Adani and other company officials in November, of paying bribes to secure Indian power supply deals.
Sri Lanka, which is facing financial challenges and enduring severe power outages and fuel shortages since it plunged into a deep economic crisis in 2022, is accelerating plans to switch to renewable energy to protect itself from rising imported fuel costs.
The Adani Group was the first foreign investor to arrive in Sri Lanka after the financial crisis hit the island nation.
“Sri Lanka is facing a major energy crisis today,” said environmentalist Sajeewa Chamikara, speaking to AsiaNews. “The only way to find a solution to that crisis is through wind farms and hydroelectric power plants. Large-scale investments are being made for that. The Adani project is just one of them.”
For the environmentalist, “Sri Lanka is not yet ready as a country to understand the sources of meeting our energy needs and we do not have a direction to build a policy on the energy production process and energy efficiency,”
Warning that such projects leave a big environmental footprint, he explained that, “The fishing community and the people living around Mannar Island have been shown how the construction of such a power plant will affect the fishing industry, and what are the impacts on the people living on the island. Based on these issues, the subsidiary company is withdrawing from the project.”
Adani Group's about-face is not only due to pressure from environmentalists, other, more heterogenous groups have also played a role. “This shows that there must be a clear discourse on how to carry out the development in our country,” said Sajeewa Chamikara. Everyone “must work together without forgetting that this is only a temporary victory”.
According to Hemantha Withanage, president of the Centre for Environmental Justice (CEJ), this is a significant achievement for the country's environmentally conscious citizens.
“The project presents a risk to migratory birds and may exacerbate flood damage for the local community,” he said. “This choice conveys [the idea] that we must not support projects that are harmful to the environment and destructive to society, even if they carry a renewable label.”
He goes on to say that, "Whatever the Reasons Adani group mentioned for withdrawing the project, there are several strong court cases including [. . .] environmental and social reasons” behind such a decision.
More destructive mining and wind projects on Mannar island threaten residents, who “are already suffering from floods due to the existing development project including wind power and road construction.”
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15/11/2019 18:11
09/12/2020 16:49
