Indian giant Adani recently withdrew from its proposed $1 billion, 500 MW wind power project in Sri Lanka. Analysts have raised concerns over the financial implications, stating that if the project had gone ahead, Sri Lanka could have faced a staggering $1.26 billion loss over 20 years.
Adani initially proposed supplying electricity at a rate of $0.0822 per kilowatt-hour (kWh), while local investors have presented a more economical offer at $0.0465 per kWh, leading to a price difference of $0.0357 per kWh. With a 500 MW capacity operating at 40% efficiency, the annual power generation would total 1,752,000 MWh, or 1.752 billion kWh.
The higher price proposed by Adani would have put a significant financial burden on the Sri Lankan government. Analysts warn that purchasing power from Adani at this premium could have long-term economic consequences, particularly when more affordable local alternatives exist.
The $1.26 billion loss over two decades represents a considerable financial strain, especially as Sri Lanka focuses on economic recovery. The government is urged to critically assess the cost-benefit ratio of such energy agreements and prioritize fiscal responsibility. Supporting local suppliers could save Sri Lanka over $62 million annually, potentially redirecting funds to critical sectors like infrastructure and development.