In a historic move set to transform Sri Lanka’s energy landscape, the Adani Group has announced plans to invest over $1 billion in wind energy projects in the island nation. This investment marks the largest foreign direct investment (FDI) in Sri Lanka’s history and the biggest power project ever undertaken in the country, according to sources familiar with the development.
Adani Green Energy Ltd (AGEL), a subsidiary of the Adani Group, will spearhead the establishment of two wind farms in Mannar town and Pooneryn village in Sri Lanka’s northern province. These wind farms will have a combined installed capacity of 484 megawatts and require an investment of approximately $740 million. Additionally, the related infrastructure to transmit electricity to consumption centers will see a further investment of over $290 million.
These projects will not only be Sri Lanka’s largest renewable energy venture but also the biggest power project to date. Last month, Sri Lanka entered into a 20-year agreement to purchase electricity from Adani’s wind power stations. Under the agreement, AGEL will be paid 8.26 cents per kilowatt-hour (kWh), a rate lower than the 26.99 cents per kWh paid to thermal projects of the state-owned Ceylon Electricity Board (CEB) and 9.67 to 13.99 cents per kWh for other wind projects. It is also lower than the 8.75 cents per kWh paid for the Odamawadi solar project.
Beyond energy, the Adani Group is also developing a $700 million terminal project at Colombo’s largest port. These initiatives are part of a broader effort to stabilize Sri Lanka’s power supply, which was severely affected by crippling blackouts and fuel shortages during an economic crisis in 2022.
In response to these challenges, Sri Lanka has enacted new legislation to overhaul its power sector and attract investment in renewable energy. This move aligns with commitments made under a $2.9 billion aid package from the International Monetary Fund (IMF) and aims to reduce losses at the CEB and make the sector more attractive to investors.
Strategically, Adani’s investment is significant as it curbs China’s growing economic influence in the Indian Ocean region, particularly in northern Sri Lanka, which is geographically close to India’s southern mainland.
This monumental investment underscores Adani Group’s commitment to expanding its renewable energy footprint and supporting sustainable development in neighboring countries.
