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Adani wind power: Project committee decided on lower tariff, report reveals
View(s):By Namini Wijedasa
Sri Lanka’s project committee (PC) on the proposed Adani wind power plants in Mannar and Pooneryn had unanimously decided that the tariff for each kilowatt hour of energy generated from the plants should be adjusted to below US cents 5.50 – a stark reduction from the US cents 8.62 that Cabinet approved in May 2024, documents submitted to the Supreme Court (SC) by the Attorney General’s (AG) Department show.
The PC comprised officials of the Department of Public Finance, Power and Energy Ministry, the Ceylon Electricity Board (CEB) and the Sustainable Energy Authority (SEA) who based their calculation on detailed technical and financial assessments, including relevant global and regional factors.
Review committee report
This is revealed in the report of a review committee set up by the Anura Dissanayake administration to revisit the Adani Green Energy Sri Lanka Limited (AGESLL) wind power projects. The 14-member team met on November 21 last year.
Their findings and recommendations, including the proposal to slash the tariff by US cents 2.76, were submitted to the SC last month by the AG as part of its motion notifying the Court of a Government decision to revoke the relevant Cabinet resolution that had sanctioned a tariff of US cents 8.26 per kWh. (However, this rate of US cents 5.50 – recommended by the review committee – is not reflected in the new Cabinet decision dated December 30, 2024).
The Sunday Times obtained a copy of the motion along with its annexures. Among other things, the review committee report points out that the SC in its 2024 judgment on the Sri Lanka Electricity Bill had said it should be established policy for all electricity procurements – even those already approved by Cabinet and for which letters of award have been issued – to be subject to competitive tendering. The Adani wind power plants were unsolicited proposals.
The annexures show that Gotabaya Rajapaksa, the former president, submitted a Cabinet memo seeking approval for the Adani projects on March 7, 2022, and that it was approved the same day. The relevant Memorandum of Understanding (MoU) was signed three days later, on March 11, between Adani Green Energy Limited (AGEL) and Sri Lanka’s Ministry of Finance, Ministry of Power and Energy, CEB, SEA and the Board of Investment.
President Rajapaksa’s Cabinet memo states that the Indian Government had introduced AGEL to the Government of Sri Lanka as an institution with the potential to be an “anchor investor” in the country’s renewable energy sector. (These are institutional investors who commit to purchasing a significant portion of shares in a company before its initial public offering).
How it became “Government-to-Government”
Subsequently, the Rajapaksa administration’s Cabinet Appointed Management Committee on Investments (CAMCI), tasked with fast-tracking projects, rubber-stamped the proposal which originally was a combination of wind and solar power plants. The solar component was dropped because there wasn’t enough land in the earmarked areas. CAMCI also recommended that the project be considered as a proposal from the Government of India to the Government of Sri Lanka – therefore, “Government-to-Government”.
An August 2023 Cabinet memorandum submitted by Kanchana Wijesekera, then Power and Energy Minister, took this justification further. It said the progress of renewable energy development projects, including the AGESLL ones, was discussed during bilateral discussions with the Indian Government by then-president Ranil Wickremesinghe on his visit to New Delhi in July 2023.
“Further, the Memorandum of Understanding signed between the two Governments recently on the Renewable Energy development [sic] identifies development of projects by investments from Indian Companies [sic],” it argued. “Under the above backdrop, it can be strongly justified to consider the said proposal of Adani Green Energy Limited of India under the category of Government-to-Government basis as required under Section 43(4)(c)(i) of the Electricity Act No. 20 of 2009, as amended.”
High interest in Mannar project
After Cabinet approval was granted for a tariff of US cents 8.25 per kWh, the CEB General Manager was directed by Cabinet to negotiate the terms and conditions of a Power Purchase Agreement (PPA), subject to legal clearance from the AG’s Department.
Accordingly, discussions were held from June 4-11, 2024. There were also several written exchanges between the two parties up to September 11 last year. But on October 7, President Anura Dissanayake and his then three-member Cabinet directed the Energy Ministry Secretary to consult the relevant authorities and parties “to review the projects”.
On December 30 last year, Cabinet – in addition to revoking the decision on the tariff – resolved to appoint a new PC and Cabinet Appointed Negotiating Committee (CANC) to re-evaluate the terms of the proposal. But as there are currently four Fundamental Rights applications before the SC and one writ application in the Court of Appeal challenging the projects, the Government will seek judicial approval to proceed, Energy Secretary Udayanga Hemapala told the Sunday Times.
Meanwhile, all studies related to the Pooneryn wind power project, including feasibility and the environmental impact assessment (EIA), are completed and cleared, the review committee report says. In February 2024, the SEA even issued the energy licence to AGESLL for the Pooneryn segment. This is a permit that allows companies to develop and operate renewable energy projects. Land acquisition is also concluded.
However, the EIA for the Mannar wind power plant has not yet been approved. When it was opened for public consultation by the Central Environmental Authority (CEA), interest was so high that it attracted 662 submissions, the report states. In addition to responding to the comments, measures were taken along with the company that conducted the EIA to recommend further measures to mitigate the possible social and environmental impacts flagged by various parties. At an official level, however, a final decision on how the project will impact migratory birds has remained elusive. Consequently, the Department of Wildlife Conservation has still not granted the requisite approval.
Meanwhile, the petitions before the Court primarily seek to deny approval for the EIA and, if already granted, a cancellation of approval; that the determination of the tariff is contrary to law and will cause losses to the Sri Lanka Government; and that the project will cause significant harm to migratory birds.
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