Prime Minister Narendra Modi with Sri Lankan President Anura Kumara Dissanayake in New Delhi on December 16, 2024.
| Photo Credit: SHIV KUMAR PUSHPAKAR
With Prime Minister Narendra Modi heading to Sri Lanka on April 4 for a three-day visit, the fate of the Adani Group’s proposed $442-million wind power project in that country will be the cynosure of all eyes. Modi’s first visit to Sri Lanka after the Janatha Vimukthi Peramuna (JVP)-led coalition assumed office will seek to reset ties with the island nation.
Sri Lankan President Anura Kumara Dissanayake made it a point to mention the deal struck with Adani Green Energy Ltd. in a public meeting on March 30. According to the Newswire website, he said that although former President Ranil Wickremesinghe wanted the government to proceed with the project on the previously agreed terms, “we will never proceed until they agree to our price, irrespective of what agreement was signed [earlier]”. The project was to be located in Mannar and Pooneryn.
Pricing issues
The meeting was an election rally, and it appears that the ruling party is again keen to play the “India is a bully” card. The President again recalled that the rate fixed earlier was ridiculously high at 8.26 US cents a unit. Another company has agreed to do the same power project at just 4.57 cents per unit, he said.
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Earlier, Dissanayake had made comments against the power purchase deal with the Adani Group ahead of the Presidential election in September 2024, adding that the deal would be revoked.
Wickremesinghe wanted Sri Lanka to accept Adani’s terms as several other investments entered the country because of Adani’s interest in it. “India is our closest neighbour… Sri Lanka should make best use of this relationship,” he said, adding that if Sri Lanka spurned Indian support, the country would become much poorer, according to Newswire.
The Sri Lankan government has made it clear that the entire Adani issue was guided by a pricing disagreement and that the country was not bothered about Adani’s troubles abroad, particularly in the US. On January 24, the Cabinet also highlighted the corruption allegations and wanted the entire project reviewed.
Reconsidering the deal
The Adani Group withdrew from the project following Sri Lanka’s decision to re-examine the entire deal. Adani Green Energy informed Sri Lanka’s Board of Investment that it would respectfully withdraw from the project.
The Sri Lankan government has maintained that it is its bounden duty to ensure that all investments are beneficial to the people. The Adani project was approved in 2024 when Wickremesinghe was President. Protests started right then because there was no competitive bidding process.
The Colombo West International Terminal (CWIT) project under construction on November 8, 2023.
| Photo Credit:
Thilina Kaluthotage/Bloomberg
Adani Green Energy is the largest renewable energy company in India. According to industry reports, the company aims to reach an operational capacity of 50 gigawatts by 2030. On March 27, Adani Green Energy announced that it had expanded its generation capacity to 13,487.8 megawatts.
The last word on the project is yet to be spoken. Prime Minister Modi’s visit is expected to reopen negotiations on the project.
Adani interest in Colombo port
The Adani Group is also deeply invested in a port project in Sri Lanka, which does not face any of these headwinds. Modi is also expected to formally launch Adani’s first major investment in Sri Lanka, the Colombo Port West Container Terminal, which was constructed without any major hurdles. As much as 70 per cent of India-bound cargo transits via Colombo, which is a key major port located in close proximity to the international shipping line.
Adani Ports had secured a majority stake in the project in September 2021, when the BJP government decided to hand over the $700 million project to its most-favoured business house. China already operates a terminal at the Colombo Port.
Unlike the green energy project, Sri Lanka’s new dispensation has been very supportive of the port project. Ports Minister Bimal Rathnayaka, one of the most powerful members of the JVP, has stated that Sri Lanka had no problem with Adani funding the port project with its own resources.
Also Read | Sri Lanka is the only country in South Asia that has some political hope: Jayadeva Uyangoda
Prime Minister Modi’s trip falls on a very curious date, and it is unlikely that either the Ministry of External Affairs or the Sri Lankan Foreign Ministry would have missed its significance. JVP’s first insurrection began on April 5, 1971, and lasted two months. Its attempt to overthrow the state failed; hundreds were killed, and the JVP was crushed. As of now, Modi is not scheduled to be at any event that honours the fallen JVP men.
A Ministry of External Affairs release said that during the visit, Prime Minister Modi will hold discussions with the President of Sri Lanka to “review progress made on the areas of cooperation agreed upon” in the Joint Vision for “Fostering Partnerships for a Shared Future” adopted during his visit to India. It added: “As part of the visit, Prime Minister [Modi] will also travel to Anuradhapura for inauguration of development projects implemented with Indian financial assistance.”
