Sri Lankan President Anura Kumara Dissanayake on Monday said that his government cannot justify awarding green energy projects at “excessive tariffs”, The Hindu reported.

The comment came five days after the Adani Group withdrew from two proposed wind power projects in the country.

During his first Budget speech in Parliament on Monday, Dissanayake said without naming the Adani Group or India, that his government will welcome investments into the energy sector based on competitive tariffs, and not by favouring a company or a country.

“We awarded a tender to a 50MW wind power project at $4.65 cents for a unit of electricity,” The Hindu quoted Dissanayake as saying. “In that context, awarding projects at an excessive tariff around $8.26 cents cannot be justified.”

The Sri Lankan president further said that no company or country will get “preferential treatment” as his government’s aim is to provide electricity to industries, exporters and consumers at competitive prices by encouraging investments that offer the lowest tariff.

On February 12, Adani Green Energy, a subsidiary of the conglomerate, conveyed to the Sri Lankan investment board its decision to withdraw from “further engagement in the RE [renewable] wind energy project and two transmission projects” in the island nation.

“However, we remain committed to Sri Lanka and are open to future collaboration if the Government of Sri Lanka so desires,” the company said.

The development came after the Sri Lankan government said in January that it had started negotiations with the Indian conglomerate to reduce the cost of power from the projects.

During his visit to India in December, Dissanayake had discussed the Adani projects with Indian officials and said that the tariff quoted by the conglomerate was too high, according to Daily Mirror (Sri Lanka).

On January 24, AFP reported that the Sri Lankan government had revoked a power purchase agreement with the Adani Group following a United States investigation into bribery and fraud allegations against the conglomerate’s chairperson Gautam Adani.

Dissanayake’s administration had launched inquiries into Adani Group projects in Sri Lanka after Adani was indicted in November by a US court over alleged corruption related to solar projects in India.

In May 2024, Ranil Wickremesinghe, the Sri Lankan president at the time, approved an agreement to purchase electricity at $0.0826 per kilowatt-hour from an Adani wind power facility planned in the island’s northwest.

However, an unidentified energy ministry official had told AFP that Dissanayake’s Cabinet revoked the deal earlier this month.

“The government has revoked the power purchase agreement, but the project is not cancelled,” AFP had quoted the official as saying. “A committee has been appointed to review the entire project.”

AFP cited official documents as confirming that the Cabinet had decided to reassess the construction of the 484-megawatt wind power plant, which is planned for the Mannar and Pooneryn regions. The project is also being challenged in the country’s Supreme Court over environmental concerns.

The Adani Group had said at the time that reports about the wind power projects in Mannar and Pooneryn having been cancelled were false and misleading.

During the Sri Lankan presidential election campaign in September, Dissanayake had said that if he was elected, he would cancel the Adani Group’s wind power project. The project “threatens our energy sovereignty”, he had said.

In June 2022, an official of the electricity board, deposing before a parliamentary committee, alleged that Prime Minister Narendra Modi pressured Gotabaya Rajapaksa, the Sri Lankan president at the time, to grant the project to the Adani Group.

Rajapaksa had denied the claim. The official later retracted his remarks, claiming that he made a false statement as he got “emotional”.

Also read: