Sri Lanka inks 20-year power purchase deal with India’s Adani Green
Reuters: Sri Lanka has entered into a 20-year power purchase agreement with India’s Adani Green Energy Ltd. for two wind power stations developed by the company, a cabinet statement stated recently.
Adani Green Energy, the renewable energy unit of the Adani Group, led by billionaire Gautam Adani, won the approval in February last year to invest $ 442 million and develop the 484 megawatts wind power plants in Mannar town and Pooneryn village, both located in the Northern province of Sri Lanka.
The company will be paid 8.26 cents per kilowatt-hours (kWh) as per the agreement, the government said. The Adani Group is also involved in building a $700 million terminal project at Sri Lanka’s largest port in Colombo.
The cash-strapped South Asian island nation, which suffered from crippling power blackouts and fuel shortages during an economic crisis in 2022, has been trying to fast-track renewable energy projects to hedge against surges in imported fuel costs.
OSL take:
The signing of the Power Purchase Agreement between India’s Adani Green Energy and the Sri Lankan authorities is indicative of the increasing appeal for business/investment opportunities in Sri Lanka’s power industry, especially in the renewable energy generation sector. The ongoing economic activities and Sri Lanka’s overall economic expansion in line with the country’s target of becoming a regional hub continues to expand the demand for power and energy in the country. The Sri Lankan government’s policy to increase the renewable energy component in the country to 70% of the power mix has opened up a host of business/investment opportunities in Sri Lanka’s renewable energy generation sector. The growing demand and the profits recorded by local businesses engaged in the renewable energy generation sector is indicative of the growth and business potential of the sector. Foreign businesses/investors could therefore confidently explore the growing opportunities in Sri Lanka’s renewable energy generation sector or even look at forming collaborations with local businesses with the aim of further expansion.