THROWING BAD MONEY AFTER BAD MONEY

India's troubled Adani invests in bankrupt Sri Lanka

Issued on: 23/02/2023 - 

Colombo (AFP) – Cash-strapped Sri Lanka on Thursday announced its first major foreign investment since it declared bankruptcy, approving a $442 million wind power project by India's scandal-hit Adani group.

Sri Lanka's Board of Investment said Adani Green Energy, part of the business empire of controversial Indian tycoon Gautam Adani, will set up two wind farms in the island's north.

The total investment will reach $442 million and the two plants will be supplying power to the national grid "by 2025", the BOI said in a statement.

The project comes after Sri Lanka awarded Adani a $700 million strategic port terminal project in Colombo in 2021.

That concession was widely seen as a bid to address New Delhi's growing concern over China's expanding influence in the region -- Adani had been nominated as the contractor by the Indian government.

The firm is building a 1.4-kilometre, 20-metre deep jetty right next to a Chinese-operated terminal at Colombo harbour, the only deep-sea container port between Dubai and Singapore.

Energy minister Kanchana Wijesekera said he met with Adani officials in Colombo on Wednesday to finalise the wind farm project.

"We expect the power plants to be commissioned by December 2024," he said.

The development comes after a US investment firm last month accused Adani's companies of accounting fraud and price manipulation, triggering a rout that saw $120 billion wiped off the group's market capitalisation.

Adani denies the allegations.

A Chinese firm was awarded a $12 million Asian Development Bank-funded project to build three wind farms on islands in the Palk Strait between India and Sri Lanka in 2019, but it was cancelled after objections from New Delhi.

China is Sri Lanka's largest official lender, accounting for 52 percent of bilateral credit. Colombo is awaiting financial assurances from Beijing to unlock a $2.9 billion bailout from the International Monetary Fund.

© 2023 AFP