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Adani Green Energy Shares Fall After Sri Lanka Cancels Power Purchase Deal

Adani Green Energy Shares Fall After Sri Lanka Cancels Power Purchase Deal

Adani Green Energy shares experienced significant volatility recently after reports surfaced regarding the cancellation of a power purchase deal with Sri Lanka. The stock, which opened at Rs 1039.45 following a previous close of Rs 1021.45, initially showed strength, reaching a high of Rs 1065.45. However, news of the cancellation caused the shares to tumble sharply to a low of Rs 1,008, marking a steep drop of over 6% from the day’s high.

The development revolves around Sri Lanka’s decision to cancel a power purchase agreement for a $400 million wind power project by the Adani Group. This move came after allegations from the United States suggested that Adani Group executives had engaged in bribery to secure power supply contracts. These allegations, reported by AFP and published in the Economic Times, added fuel to the controversy.

Despite these reports, the Adani Group strongly denied the claims. A spokesperson for the conglomerate stated that reports of the cancellation of its 484 MW wind power projects in Mannar and Pooneryn were “false and misleading.” According to the group, the Sri Lankan government’s decision on January 2, 2025, was not an outright cancellation but rather a routine tariff review. This review, the group explained, was standard practice under a new administration aiming to align terms with updated energy policies and priorities.

The spokesperson emphasized that the project remains on track and reiterated the group’s commitment to sustainable energy initiatives. The clarification aims to dispel doubts among investors and stakeholders regarding the future of the wind power projects in Sri Lanka.

The fluctuations in Adani Green Energy’s share price reflect market sensitivity to such developments. As renewable energy continues to be a critical area of growth for the conglomerate, any perceived setbacks are closely watched by investors. The company’s clarification may help stabilize market sentiment, but the evolving situation will likely keep traders and analysts on edge.

For now, the focus remains on how the situation unfolds between the Adani Group and the Sri Lankan government, and how these developments impact broader renewable energy ambitions in the region.

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