After port terminal deal, Adani group bags power projects in Sri Lanka

There is no official announcement or statement yet on the agreement to jointly execute renewable power projects in Mannar, on Sri Lanka’s north-western coast, and Pooneryn, located just south of Jaffna Peninsula, from the Sri Lankan side, the Adani Group, or Indian authorities, raising questions in some quarters on the apparent lack of transparency in an international agreement. “While it was not announced, the CEB also signed a Memorandum of Understanding with India’s Adani Green Energy Ltd,” the Colombo-based Sunday Times reported.

Revealing the details of the MoU, Sri Lanka’s weekend newspaper TheSunday Morning said the two renewable energy projects, involving the Adani Group, were aimed at generating combined capacity of 500 MW, at a cost of $ 500 million. Both projects are in the Northern Province, where New Delhi objected to a Chinese energy project last year, citing proximity to the Tamil Nadu coast.  

The agreement was inked on Friday, the same day that the National Thermal Power Corporation (NTPC) of India and the Ceylon Electricity Board (CEB) agreed to set up a 100 MW solar power project in Sampur, in the eastern Trincomalee district.

The development comes months after Adani Group chairman Gautam Adani visited Sri Lanka and held talks with President Gotabaya Rajapaksa, on possible investments in the island nation. During his visit, his team visited the northern Mannar district to explore potential for wind power projects. India’s involvement in renewable energy projects in Sri Lanka comes alongside the Rajapaksa administration’s thrust on cleaner energy.

Sri Lanka has a daily peak demand of over 2000 MW, and is currently experiencing a severe fuel and power shortage, resulting in right hour-long power cuts across the country that citizens’ groups have been protesting.

Scepticism over Indian support

Sri Lanka is also in the midst of its worst economic crisis in years, prompting the government to tap assistance from different sources. India has so far extended $ 1.4 billion this year, and Finance Minister Basil Rajapaksa is scheduled to visit New Delhi on Tuesday, his second visit in three months, to firm up a further $ 1 billion support.

“Keenly look forward to welcoming Hon’ble Finance Minister @RealBRajapaksa to #India next week. His visit will consolidate ongoing efforts to further strengthen Indo-Lanka economic partnership,” the Indian High Commission said in a tweet on Saturday.

Meanwhile, India’s assistance is being viewed with scepticism in Sri Lanka by some. Echoing this sentiment in its editorial on Sunday, titled ‘India’s strategic calculations as Lankans suffer’, the widely read Sunday Times accused New Delhi of resorting to “diplomatic blackmail” by tying emergency financial support extended to Colombo, to strategic projects and “several maritime security arrangements”, to counter China’s “naval expansion”.

“The Reserve Bank of India has USD 631 billion in reserves. Sri Lanka is asking for one billion. It was press-ganged to sign Sampur and other projects before Mr. Rajapaksa came to New Delhi. This is diplomatic blackmail. India has 74 days of oil reserves in stock, but is finding it so difficult to help a “friend and neighbour” in difficulty without making it cringe, crawl, and concede its national security interests and neutrality in the name of India’s own “strategic calculations”, the editorial said.