Adani & Sri Lanka's renewable energy: A G2G project? But, how?

COLOMBO (News 1st); Multiple factions have raised concerns over the decision to award India's Adani Group with an on-grid renewable energy development project in Mannar and Poonaryn, by considering it as a government-to-government arrangement.

These groups have called on the government to disclose the agreements related to the project.

The latest World Bank report on Sri Lanka titled "Offshore Wind Roadmap for Sri Lanka", the island nation has good conditions for offshore wind and its locational potential is estimated at 56 GW.

The roadmap identified two large areas in the Gulf of Mannar that could be suitable for Sri Lanka’s first offshore wind project, and accordingly, an area in Mannar was allocated for the Wind Power Project that will be initiated by India's Adani Group.

In addition, Sri Lanka has allowed the Adani Group to also initiate a renewable energy project in Poonaryn, and the total investments for both projects is a whopping US $ 442 million.

On the 11th of March 2022, the Memorandum of Understanding for the project was signed after the cabinet paper submitted by then-President Gotabaya Rajapaksa was given the green light by the Cabinet of Ministers.

The approval was given based on several preliminary requirements, including the need to pursue action on the next steps of the project based on the outcome of the feasibility study.

The cabinet paper also notes that Adani Green Energy Limited of India, which was awarded the project, was introduced to the Government of Sri Lanka by the Government of India.

Another cabinet paper on the same project, dated the 14th of August 2023 notes that the project should be considered as a government-to-government arrangement. 

Why is this project being termed as a government-to-government arrangement? 

The main reason to term the renewable energy development project as a government-to-government arrangement, it to give the project the necessary legal standing. 

According to Sri Lanka's Electricity Act, such arrangements can be made according to two methods, and two methods only. 

The first is to call for open competitive bids, and select the most advantageous bidder.

The other, is for a proposal to be put forward to the government of Sri Lanka, by another government.

In this case, that is the on-grid renewable energy development project in Mannar and Poonaryn, the strategy adopted to award the project to one single company without calling for competitive bids and selecting the most  advantageous proposal, was to consider it as a government-to-government proposal, and award the project to Adani Green Energy Limited.

However, several factions continue to raise concerns on how Adani Green Energy Limited can be considered as the government of India. 

Sri Lanka's State Minister of Power and Energy, Indika Anuruddha Herath told News 1st on Wednesday (30) that the proposal would be directed to the Public Utilities Commission of Sri Lanka, which would then follow the directives given by the Attorney General.

However, the State Minister said that NO decision had been reached on the method by which the project would be awarded.