Sri Lanka reviews Adani power project amid bribery allegations

Sri Lanka is reevaluating a $440 million power purchase agreement with India’s Adani Group following allegations of bribery leveled against the conglomerate by U.S. authorities.

The allegations, which Adani denies, claim the group’s executives paid bribes to secure contracts in India.

Reports from AFP indicate that President Anura Kumara Dissanayake’s cabinet revoked the 20-year power purchase agreement signed in May 2024. However, the project itself, which includes two 484-megawatt wind power stations in Mannar and Pooneryn, has not been canceled.

Instead, a committee has been appointed to review the terms of the agreement to ensure alignment with the country’s energy policies and priorities under the new administration.

The Adani Group responded to the reports, denying the cancellation of the deal. A spokesperson for the company described the claims as “false and misleading,” clarifying that the Sri Lankan Cabinet’s decision on January 2, 2025, to reevaluate the tariff is part of a standard review process.

The company reiterated its commitment to investing $1 billion in Sri Lanka’s renewable energy sector.

The allegations against Adani stem from a November 2024 indictment by U.S. authorities accusing Gautam Adani and other executives of bribery and other misconduct. These accusations have also led other countries, such as Kenya, to cancel Adani-related projects worth over $2.5 billion.

Sri Lanka, having faced significant economic challenges in recent history, including fuel shortages and power outages, has prioritized renewable energy development. Under the power purchase agreement, Adani Green Energy was to be paid 8.26 cents per kilowatt-hour (kWh) for electricity generated by the wind power projects.

The situation remains under review as Sri Lanka seeks to balance its energy needs and economic recovery with transparency and accountability in foreign investments.