Viraj Fernando    – virajfernando03@gmailcom

1. Procedural Irregularities in Awarding the Project

The best argument we have to counter the arbitrary award of this project to Adani Green Energy Limited (AGEL), is to ask the question, whether AGEL would have been awarded such a project and at a PPA price of $0.0826 in India under Indian regulations and to insist in consideration of the justification of the project from the perspective of Indian regulations.

Under the usual standards applied by India’s own energy regulatory bodies, the Solar Energy Corporation of India (SECI) and Ministry of New and Renewable Energy (MNRE), projects of this scale would require strict procedural compliance and competitive bidding by tender. This is especially true for projects expected to secure government land or investment or impact national energy infrastructure. In this case, however, Adani was granted the Mannar wind energy project on government owned land without adhering to such a transparent process.

2. Excessive PPA Price Setting a Risky Precedent

A core concern with the Adani Mannar project is the high PPA rate of $0.0826 per kWh, which significantly exceeds standard wind project tariffs.

In renewable energy projects, the PPA price is bench marked to the Levellised cost of energy” LCOE. In the determination, of the LCOE wind energy availability is a significant factor along with the capacity utilization factor CUP. Wind energy is determined by the following formula:

 Wind power = ½ x wind density x (wind speed)³.  Upon applying this formula wind energy is availability for Gujarat is found to be 43,905 units which is significantly lower than that in Mannar which is 149,776 units. Yet as the following table will show when in wind poor Gujarat AGEL gets PPA rates of the range $0.029 -0.034, AGEL has been awarded a PPA rate of $ 0.0826. One of the ways this price has been manipulated is by getting the Public Utilities Commission to carry out a fake study to get a capacity utilization factor CUP much lower than the actual, by misaligning the anemometers. This fraud has been pointed out in CEB reports on this project.

To illustrate:

Region	Wind Density (W/m²)	Wind Speed (m/s)	Typical PPA Rate (USD/kWh)
Gujarat (India)	283	6.77	$0.029 – $0.034
Mannar (Sri Lanka)	522	8.31	$0.0826 (Adani)

From the above table for an altitude of 100m, it will be evident that the wind energy conditions in Mannar are highly favorable, with energy availability estimated to be 3.4 times higher than that of wind conditions in Gujarat, yet the project’s PPA rate does not reflect this advantage.

In India the PPA rates given to wind power projects vary between $0.029 -0.034. Whereas Adani has been awarded a PPA rate of $0.0826, and the projected annual income at this rate is                   $ 211,500,000 ($ 211.5 million per year). If we assume the same rates as in India would apply for the Mannar project, the following table shows the pricing and the potential excess costs from a PPA set at $0.0826 awarded to Adani for the Mannar project compared to typical rates.

Proposed LCOE (USD/kWh)	Projected Annual Income at 250 MW (USD)	Excess Annual Payment at $0.0826 PPA (USD)
$0.029	76,650,000	134,850,000
$0.034	89,910,000	121,590,000

The excess payment (if we consider PPA rate of $ 0.034 to be fair for Mannar) is $ 121.59 million. This excess payment (even after considering the higher PPA rate of $0.034, over a 25-year project lifetime will be $ 3.039 billion!!  

Such a pillage would be detrimental to Sri Lanka’s economy, in many ways – not only the by the drain of our money by itself. The more damaging aspect of such a PPA rate would to discourage foreign investors, as higher energy prices lead to uncompetitive manufacturing costs and make it difficult for new industries to thrive.

3. Comparison with Global Standards and LCOE Trends

The Levelized Cost of Energy (LCOE) is a key benchmark for pricing PPAs globally. LCOE for wind projects worldwide has declined steadily over the years, a trend documented by the International Renewable Energy Agency (IRENA). Below are global LCOE averages for onshore wind energy in recent years:

Year	LCOE Global Average for Onshore Wind (USD/kWh)
2018	$0.046
2020	$0.039
2023	$0.034

If the LCOE of $0.046 was valid for Mannar’s smaller CEB-funded project in 2018, it is reasonable to expect that current rates would be lower due to increased efficiency and economies of scale. Adani’s 250 MW project is over 240% larger than the CEB’s 103.5 MW project, which should lead to an even lower LCOE, than $0.034. The fact that Adani’s PPA is priced at $0.0826 raises questions, especially since no recent Indian project awarded to Adani has exceeded $0.034 per kWh.

4. Environmental Concerns and Site Alternatives

Beyond the financial issues, the Mannar project site is problematic due to environmental concerns. The area is a crucial habitat for migratory birds, making it sensitive to large-scale developments. Bird migration routes could be severely affected, harming local biodiversity and eco-tourism, an important aspect of Mannar’s economy.

Alternative sites such as those in Anuradhapura have been identified as wind-rich areas with fewer environmental constraints. This region, which also shows promise according to Danish Technical University’s Global Wind Atlas studies, could serve as a suitable alternative if the Mannar project is reconsidered.

5. The Larger Implication for Sri Lanka’s Economic Development

The future economic growth of Sri Lanka hinges on affordable, abundant energy. A central factor in attracting foreign direct investment (FDI) is the availability of low-cost electricity to support industries and boost economic growth. For example, Vietnam, with its low electricity prices, attracted $36 billion in FDI in 2023 alone. It is clear that competitive electricity rates are essential to industrialize and create jobs. An artificially high PPA, such as Adani’s, would definitely hinder Sri Lanka from realizing its economic potential.

To further illustrate, let’s look at electricity prices for industries in the region:

Country	Average Industrial Electricity Price (USD/kWh)
India	$0.084
Vietnam	$0.074
Bangladesh	$0.096
Sri Lanka	$0.144

If Adani’s high PPA becomes a standard, Sri Lanka’s industrial electricity rates could soar, undermining competitiveness against neighboring countries and discouraging investment in local industry. If Sri Lanka continues with such high-priced agreements, it will lose a critical edge in attracting FDIs needed for economic growth.

Conclusion

The Mannar wind energy project granted to Adani must be reconsidered in light of its procedural irregularities, inflated PPA rate, environmental impact, and potential to stifle Sri Lanka’s economic prospects. By re-evaluating this project and adopting a fair, transparent approach to awarding energy projects, Sri Lanka can position itself as a competitive, investment-friendly nation. A fair and economically viable approach to energy pricing is essential if Sri Lanka is to realize its vision of industrial growth and long-term prosperity.

1. Procedural Irregularities in Awarding the Project
   The best argument we have to counter the arbitrary award of this project to Adani Green Energy Limited (AGEL), is to ask the question, whether AGEL would have been awarded such a project and at a PPA price of $0.0826 in India under Indian regulations and to insist in consideration of the justification of the project from the perspective of Indian regulations.
   Under the usual standards applied by India’s own energy regulatory bodies, the Solar Energy Corporation of India (SECI) and Ministry of New and Renewable Energy (MNRE), projects of this scale would require strict procedural compliance and competitive bidding by tender. This is especially true for projects expected to secure government land or investment or impact national energy infrastructure. In this case, however, Adani was granted the Mannar wind energy project on government owned land without adhering to such a transparent process.
   
2. A: Fact – No procedural irregularities in awarding the Project:
   •CAMCI approval under Fast tracking of Investments” – Adani’s proposal was considered as part of this process too. Thereafter, Cabinet Approval was granted to enter into MOU with Adani Green.
   •Ministry of Finance’s notification states that in cases where CAMCI’s decision prevails, there is no need for tendering process.
   •The Project complies with the provisions of Electricity Act –
   oCabinet of Ministers have also approved the project as G-2-G.
   oPUCSL has granted approval to procure power from Adani under Section 43 (4) and its other provisions.
   oProjects form part of the LTGEP 2023-2042 approved by PUCSL.
   •The Govt. has in the recent time has received single bidder with single location based RE proposals and the Govt. has approved them too. The procurement process followed for these projects i.e., Technical Evaluation by Project Committee (PC) and Tariff Negotiations by CANC, is also followed for Adani’s projects.
   •Proposal also complies with the recent MOU between India-Sri Lanka on Renewable Energy Co-operation” allowing both private & public sector participation from both Countries.
   B: The argument to evaluate projects in Sri Lanka basis the Indian or other Country Regulations, seems illogical!
   •First of all, unlike Sri Lankan Electricity sector, the Indian Electricity sector provides lot of incentives to private developers in implementing the RE projects. (e.g. All RE projects are termed as Green” projects under EIA and don’t have to undergo the EIA process and its associated costs, this reduces the implementation timeline by 1-2 years, as compared to that of SL. However, the Financial Institutions/Lenders conduct the EIA in parallel)
   •Second, India as a stable economy has an Investment Grade rating thereby making the external funds easily available at competitive borrowing rates.
   •Thirdly, government owned land is also made available to private players on sub-lease basis without having constraints of mortgaging to foreign lenders & without any restriction on mortgaging for initial 5 years.
   •All the above reduce implementation time for the project coupled with standard Project Agreements (e.g. PPA), enable faster approval of Projects.
   •Having said that, the regulatory bodies of India (which are CERC & SERC i.e. Central Electricity Regulatory Commission & State Electricity Regulatory Commission) are empowered to adopt the tariffs discovered by SECI. So, if the tariff discovered is