A storm is brewing over the Government's decision to grant Indian giant Adani a 500MW wind power project and also at favourable terms ignoring local developers.
Recently, based on a Cabinet approval, the Government has signed a MoU with Adani Green Energy Ltd., to offer 500MW of wind plants. Sources said Adani has been offered the two best wind sites in Sri Lanka, namely Mannar and Poonarine, at a lucrative tariff of 7.55 US cents per kWh.
The US Dollar tariff was despite local developers having proposed a tariff in Sri Lankan Rupees under 5 US cents/kWh at the same sites when the Expression of Interest was called by the State Ministry of Solar, Wind and Hydro Power Generation Project Development in November last year. However, Adani has been offered a tariff of over 50% which remains in USD.
They said the Electricity Act of Sri Lanka, No.20 of 2009 states that large scale projects such as this, can only be offered through unsolicited proposals if they are Government to Government (GtoG) projects. However, Adani which is a privately owned company of India, does not fall within the provisions of the statute.
Sources alleged that the newly appointed Minister of Power and Energy is pressurising the Sustainable Energy Authority (SEA) officials to issue Provisional Approval (PA) for the Adani project which local developers claim as 'illegal.'
This is in spite of the Ceylon Electricity Board Engineers Union (CEBEU) officially declaring in a statement in April this year that it will not be entertaining unsolicited proposals of this nature.
The Wind Power and Grid Connected Solar Power Energy Associations have jointly opposed the Adani-Govt. deal and planning to take legal action.
Locals are also furious over the Government agreeing to an expensive USD-based tariff when the country is going through its worst ever economic crisis as foreign reserves are in severe shortage even to import essentials.
'Considering all factors, the Government should have offered the solar wind projects to local developers who have been offering LKR based tariffs for almost a decade,' they emphasised.
They argued that in the event the local developers too are offered USD based tariff; the income will remain within the country.
It is a general practice with foreign developers to remit at least eight times the investment out of the country during the project Power Purchase Agreement period of 20 years.