Adani Market Cap Recovery by 2028
MetaculusDec 01, 2023
India: Adani Exits Sri Lanka's $442M Wind Power Projects
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Above: Chairman of Adani Group, Gautam Adani, in Jaipur, India, on Nov. 30, 2024. Image copyright: Vishal Bhatnagar/Contributor/NurPhoto via Getty Images
The Facts
Adani Green Energy formally announced on Thursday its withdrawal from two wind power projects in Sri Lanka. The projects, valued at $442M, were meant to generate 484 megawatts of power in the Mannar and Pooneryn regions.
In the letter sent to Sri Lanka's Board of Investment, the company said that while it "fully respects the sovereign rights of Sri Lanka," it would "respectfully withdraw." It cited delays, including an ongoing Supreme Court case, for the withdrawal.
The company had spent approximately $5M on preliminary development work and conducted over 14 rounds of discussions with state-appointed committees to establish a 20-year fixed tariff agreement.
The Spin
Narrative A
The Adani Group withdrew from the projects after multiple rounds of negotiations and significant investment in predevelopment activities as they were financially unviable amid unresolved environmental clearance. While withdrawing from this investment, the company remains committed to Sri Lanka and is open to future collaboration should the government invite the group to participate in any new projects.
Narrative B
Though Adani's exit could impact Sri Lanka's efforts to fast-track renewable energy projects, the government's review was necessary to secure better terms for the country and address concerns about the high tariff rates and environmental impact. The renegotiation attempt aimed to protect national interests and ensure more favorable energy rates for the population.
