Cash-strapped Sri Lanka has approved a USD 442 million wind power project by India’s crisis-plagued Adani Group, marking the island country’s first significant foreign investment since it filed for bankruptcy in 2022.
Adani Green Energy, a division of the Indian tycoon Gautam Adani’s business empire, would build two wind farms north of the island, according to Sri Lanka’s Board of Investment.
The BOI stated that the two plants will begin delivering electricity to the national grid “by 2025” and that the total investment will be USD 442 million.
In 2021, Sri Lanka awarded Gautam Adani a contract for a USD 700 million major port terminal project in Colombo.
That concession was primarily regarded as an effort to ease New Delhi’s rising worries about China’s growing influence in the area. The Indian government had chosen Adani Group as the contractor.
At Colombo Harbour, the only deep-sea container port between Dubai and Singapore, the company is constructing a 1.4-kilometre, 20-meter-deep jetty immediately adjacent to a Chinese-operated terminal.
Kanchana Wijesekera, the energy minister, reportedly conducted a meeting with Adani Group representatives in Colombo to finalise the wind farm deal.
“We expect the power plants to be commissioned by December 2024,” he stated.
The development follows a stock crash in which Adani Group lost USD 120 billion in market capitalisation after the US-based investment research firm Hindenburg accused the company’s subsidiaries of accounting fraud and price manipulation in January 2023.
Adani Group has disputed the charges.
In 2019, a Chinese company was given a USD 12 million contract from the Asian Development Bank to construct three wind farms on islands in the Palk Strait, which separates India and Sri Lanka. However, New Delhi objected to the proposal, and it was cancelled.
China accounts for 52% of bilateral credit and is Sri Lanka’s largest government lender. For Colombo to receive a USD 2.9 billion rescue from the International Monetary Fund, Beijing must provide financial guarantees