The wind power project initiated by India’s Adani Group appears to be veering off course, missing its initial deadline scheduled for the end of next December.
Sources close to the subject revealed that the anticipated launch was facing delays due to the inability of Sri Lanka and India to finalise crucial agreements on the project’s initial steps.
The investment is still in the early stages of discussion and there has been no substantial progress on the project so far, as learnt by The Sunday Morning.
The Ceylon Electricity Board (CEB) issued a Request for Proposal (RFP) to Adani in May and at that time the board indicated that the determination of energy purchasing prices would follow upon receipt of a response from Adani regarding the RFP.
However, as learnt by The Sunday Morning, the parties are yet to reach a final agreement on the unit price.
Against this backdrop, a substantial investment for 700 MW of solar power is set to commence in Poonakary in the northern region.
The Poonakary project, slated for completion by 2026, is anticipated to utilise the same transmission line to be constructed by Adani.
Consequently, the progress of the Adani project holds equal significance for Poonakary, as Adani’s progress may affect the Poonakary development as well, as disclosed by the source.
Adani’s proposed 500 MW wind and solar project stands as the sole large-scale investment currently undergoing processing by the Sri Lankan Government.
Adani Green Energy Ltd. (AGEL) is spearheading this investment, valued at $ 442 million and aimed at establishing 500 MW of renewable energy plants, encompassing both wind and solar technologies in Mannar and Pooneryn.
When contacted, CEB Chairman Nalinda Ilangakoon said that the project was still in the discussion phase and that no definitive decision had been reached regarding unit prices.
Similarly, speaking to The Sunday Morning, Sri Lanka Sustainable Energy Authority (SLSEA) Chairman Eng. Ranjith Sepala said that there was no conclusive decision on the Adani project at this stage.
He highlighted the need to finalise groundwork and initiate the project in the upcoming year: “All renewable energy projects should complete their initial documentation work and commence physical operations next year.”
Last year, Sri Lanka entered into a Memorandum of Understanding (MoU) with AGEL to establish wind and solar power plants. The MoU was between AGEL and various entities, including Sri Lanka’s Treasury Secretary, Secretary to the Ministry of Power, the CEB, the SLSEA, and the Board of Investment (BOI).
A few months after the signing of the MoU, the SLSEA issued Provisional Approval for AGEL under Sections 16 and 17 of the SLSEA Act, having satisfied the technical, economic, and environmental feasibility of the project.
In a letter dated 18 October 2022, CEB Chairman Ilangakoon had informed the ministry secretary that obtaining specific Cabinet approval was mandatory for the CEB to purchase energy from AGEL.
The request had been based on the Sri Lanka Electricity Act and Ilangakoon had urged the secretary to initiate the process. Additionally, Ilangakoon had called for the appointment of a project committee to develop necessary documents and evaluate proposals for a 500 MW wind energy project.
The letter had emphasised compliance with the Public Utilities Commission of Sri Lanka’s (PUCSL) rules and guidelines, with the aim of determining the electricity purchase price at the least cost.
The CEB had highlighted the need for a Cabinet Appointed Negotiation Committee (CANC) to guide the project committee and approve relevant matters in accordance with procurement guidelines and electricity procurement rules.
The final step mentioned is the conversion of the Provisional Approval to an energy permit under Section 18 of the SLSEA Act, contingent upon timely submission of requested documents by AGEL within 12 months.
Recently, Power and Energy Minister Kanchana Wijesekera refuted claims of project delays and confirmed that the Cabinet had approved the recruitment of technical experts for a committee tasked with evaluating the project.
During a visit to Sri Lanka in July, Indian business tycoon Gautam Adani had pledged to complete the 500 MW solar and wind power project in Mannar and Pooneryn by January 2025.
Nevertheless, an expert at the CEB contradicted the Minister’s statement, noting that it was unlikely that the project would be completed by the end of next year, since it was already behind its initial schedule.
An engineer attached to the CEB, who wished to remain anonymous, told The Sunday Morning that unless the project was expedited in the coming months, there was no possibility of completing it by the end of next year as envisioned by the Minister.
Moreover, it is learnt that a date is yet to be fixed even for the launch of physical operations, while the two parties have failed to agree on the unit prices as well.