Sri Lanka’s Board of Investment approved the commissioning of two wind power plants by Adani Green Energy Limited for a total of $442 million on Wednesday, providing a boost to the beleaguered Adani Group. This will be the island nation’s first significant foreign investment since declaring bankruptcy last year.
The Board of Investment, Sri Lanka’s “apex agency for foreign direct investment,” said the two would be operational in two years and connected to the island nation’s power grid by 2025.
Adani Green Energy is the renewable energy division of the apple-to-airport conglomerate.
According to Reuters, Adani officials are in Colombo to assess future projects, including a $700 million port terminal at Sri Lanka’s largest port, which is seen as an attempt to address India’s concerns about China’s growing influence in the region.
The company is constructing a 1.4-kilometer-long, 20-meter-deep jetty next to a Chinese-operated terminal at the only deep-sea container port between Dubai and Singapore.
This a good news for Gautam Adani’s conglomerate, which this week saw the combined equity market value of its ten companies fall below $100 billion, even as the billionaire tycoon hires legal and communications firms to reassure investors following a report alleging ‘brazen stock manipulation and accounting fraud’ by short-seller Hindenburg Research.
Adani has fallen from No. 2 on Bloomberg’s list of the world’s richest men to No. 29 this morning. His net worth is less than $50 billion.
Gautam Adani has claimed innocence and the government has distanced itself from the group, particularly in light of allegations of overexposure by public financial institutions such as the State Bank of India.
This month, Finance Minister Nirmala Sitharaman and Reserve Bank of India Governor Shaktikanta Das both emphasized the importance of strong regulatory measures governing the Indian banking sector.
However, their assurances have been largely dismissed by a political opposition that has accused Prime Minister Narendra Modi and his ruling Bharatiya Janata Party of ‘favoring’ the Adani Group.
Meanwhile, Sri Lanka has been dealing with its financial crisis for several months, and last week raised power prices by a staggering 66% to secure a $2.9 billion bailout package from the International Monetary Fund; power prices were raised by 75% last year.
Sri Lanka’s financial crisis has had a significant impact on the lives of its beleaguered citizens, who made headlines last year when they took to the streets to protest rising living costs and clashed with state security personnel.
It is hoped that Adani’s plants will kickstart a recovery, at least in the power generation sector, while also creating 1,500 to 2,000 new jobs.
