Colombo, October 2025 —
The Adani Group has formally withdrawn from its proposed US$440 million wind power project in Mannar and Pooneryn, citing regulatory uncertainties and environmental concerns. The exit, confirmed by the Ceylon Electricity Board (CEB), halts what would have been one of the largest renewable energy investments in Sri Lanka’s history.
The Adani project, initially approved in 2023, aimed to generate 250 MW of clean energy and support the government’s goal of achieving 70% renewable power generation by 2030. However, prolonged negotiations over power purchase agreements (PPAs), environmental clearance delays, and grid connection disputes with the CEB led to strategic withdrawal.
From an economic viewpoint, this development signals both a challenge and an opportunity. On one hand, it highlights the bureaucratic and regulatory bottlenecks that continue to hinder large-scale foreign investment. On the other, it underscores the need for a clear, investor-friendly renewable energy policy framework that balances national security, environmental sustainability, and transparent project governance.
The Adani withdrawal may slow Sri Lanka’s green energy transition in the short term, but analysts note it could prompt the government to prioritize domestic and regional investors through new incentives and streamlined approval processes. The energy ministry has already hinted at replacing the project with a joint-venture model involving Sri Lankan state-owned entities and regional developers.
Energy security remains a core economic concern. With rising fuel import costs and increasing demand, the shift toward renewables is not just environmental but fiscal. Strengthening policy credibility is crucial for attracting the next wave of investment in solar, wind, and hydro projects that could reduce Sri Lanka’s import dependence and stabilize its energy mix.
