The Government of Sri Lanka has signed an MOU with the Indian based Adani Group to offer 500MW of Wind Plants to Adani Green Energy Limited following the granting of approval from the Cabinet.
Adani, an Indian multinational conglomerate, have been offered the two best wind sites in Sri Lanka, namely Mannar and Poonarine, at a lucrative Tariff of USD 7.55 cents/kWh. Despite local developers having proposed a tariff in Sri Lankan Rupees under USD 5.00 cents/kWh at the same sites when the Expression of Interest was called by the State Ministry of Solar, Wind and Hydro Power Generation Project Development on the 16th of November 2021, Adani has been offered a tariff over 50% which remains in USD.
Importantly, the Electricity Act of Sri Lanka,No.20 of 2009, states that large scale projects, such as this, can only be offered through unsolicited proposals if they are Government to Government (GtoG) projects. However, Adani is a private owned company of India, and does not fall within the provisions of the statute.
Further, it has been revealed that the newly appointed Minister of Power and Energy is pressurizing the Sustainable Energy Authority (SEA) officials to issue Provisional Approval (PA) for this illegal deal. This is in spite of The Ceylon Electricity Board Engineers Union (CEBEU) officially declaring in a statement dated 10th April 2022, that they will not be entertaining unsolicited proposals of this nature.
In the midst of the Country’s worst ever economic crisis, speculation arises as to why the government has decided to offer USD based tariffs to foreign companies whilst the country suffers from a desperate shortfall of foreign currency reserves and why the project was not offered to local wind plant developers who have been offering LKR based tariffs for almost a decade.
Moreover, in the event the local developers are offered a USD based tariff; the income will remain within the country. It is a general practice with foreign developers to remit at least 08 times the investment out of the country during the project Power Purchase Agreement period of 20 years.
The Wind Power and Grid Connected Solar Power Energy Associations have jointly opposed to this move by the Ministry of Power and are seeking to take legal action.