INTERVIEW | Sri Lanka Wants Renewable Power and it’s in India’s Curiosity to Buy That Energy: Rohan Pethiyagoda

What’s your first response to this huge announcement from Adani Inexperienced?

Each aid and disappointment. I’m relieved {that a} undertaking that was removed from clear has been annulled; I’m dissatisfied as a result of Sri Lanka will lose the chance to realize 2,000 gigawatt-hours of wind power, renewable power, very quickly.

You didn’t need the undertaking to go forward in its current type, is that what you’re saying? 

Allow us to have a look at this holistically. The undertaking concerned two wind farms, in Mannar and Pooneryn. The undertaking has been within the pipeline since about 2019, the time of President Gotabaya Rajapaksa. The ultimate value that was authorised by the Sri Lankan Cupboard below President Ranil Wickremesinghe final yr was nearly 3 times the worth often tendered in India for a kilowatt-hour of wind power.

Sri Lanka continues to be not out of the doldrums of its large financial collapse. So, there could be a threat premium connected to the nation. However a threat premium of 300 per cent is ridiculous. That was my first objection: the worth we have been requested to pay. We have been paying far too excessive a value. Now, can this be pinned on Adani? No, as a result of it takes two to tango. There would have been events within the Sri Lankan authorities that have been complicit in negotiating this greater value. Many individuals paint me as being anti-Adani and even anti-India. I’m neither. Sri Lanka wants India for its future improvement. We additionally want traders like Adani.

My second objection is that there was no transparency. The standard method during which energy is bought in Sri Lanka is thru a young course of. We now have had different tenders for wind energy within the Mannar area, and people have yielded a value of between four-and-a-half and 5 cents. Just lately we had an award by the current authorities of Anura Kumara Dissanayake for a 50-megawatt plant. However contemplating that the Adani crops are 5 to 10 occasions the scale of that 50-megawatt plant, we must always have gotten the economies of scale kicking in and obtained an excellent lower cost from Adani.

The undertaking concerned untruths from the outset. The Sri Lankan governments of Rajapaksa and Wickremesinghe maintained that this was by some means a government-to-government undertaking between India and Sri Lanka. Nonetheless, the federal government of India, so far as anybody is aware of, has by no means been related to this undertaking.

Thirdly, there may be the atmosphere. Mannar Island is vital to the South Asian fowl migration hall. Thousands and thousands of birds migrate by this space yearly. There could be environmental penalties from a wind power undertaking on the island. Our objection to the Adani undertaking on the grounds of the atmosphere was merely that the process was not adopted. Sri Lanka has environmental guidelines, environmental affect assessments and so forth. If these are performed correctly and the central environmental authority indicators off on these affect assessments and approves the undertaking, there could be no downside. However for this undertaking, the central environmental authority avoided approving it on environmental grounds and the federal government nonetheless tried to push it by. I communicate of the previous Wickremesinghe authorities.

However didn’t the top of the Ceylon Electrical energy Board, M.M.C. Ferdinando, inform a parliamentary committee that President Rajapaksa had mentioned that this was a undertaking Prime Minister Modi was personally concerned in and that he ought to clear it instantly? (Ferdinando resigned from his place a few days after this assertion). So, it does appear there had been some form of stress from Delhi.

Sure. What Ferdinando knowledgeable the parliamentary committee was that President Rajapaksa had instructed him he had a private request from Modi asking that this undertaking be given to Adani. Ferdinando mentioned this in Parliament, and on the exact same night, President Rajapaksa issued an announcement denying that he had ever mentioned such a factor to Ferdinando. There seems to be no doc between the federal government of India and Sri Lanka. Such paperwork are often talked about publicly and introduced throughout conferences of heads of presidency.

It appears that evidently this was confected in Sri Lanka by the governments of Rajapaksa and Wickremesinghe to provide the impression that this was by some means coming from Modi, when in truth it could not have been in any respect. This may need simply been these leaders attempting to color an image of being below stress from Massive Brother India to provide this undertaking to a favoured social gathering. It could have additionally been that they have been social gathering to forcing Adani to provide a better value due to a vested curiosity that they had in these initiatives.

Once more, as I mentioned, it takes two to tango. The Sri Lankan authorities, in Could 2024, awarded this undertaking to Adani at an outrageous value, having gone by two committees, not all members of which agreed to signal the committee studies. Clearly, there have been reservations or some name for clarification. We additionally want to grasp the worth distinction: the distinction between the 8.26 cents per kilowatt-hour that was agreed to by the Sri Lankan Cupboard final yr and the worth at which the current authorities awarded a young, 4.65 cents. The distinction is equal to about $72 million a yr. We now have been signing up with Adani for 26 years. This was a present that was meant to be given to some corrupt politicians, most likely. This was a scheme that will have been confected to deprive Sri Lankan electrical energy shoppers of an affordable value for a commodity they should dwell.

Wind power ought to be logically cheaper than coal electrical energy from thermal crops or every other typical supply. There are a number of petitions within the courts relating to this undertaking. What occurs to these petitions?

We have no idea as a result of the lawyer normal should make a illustration on these issues. That is one thing we should wait and see the way it evolves. In a perfect situation, I’d anticipate that now that Adani has withdrawn their provide, the circumstances could also be dismissed. However that is finally a matter for the courts. Whether or not the courts determine to proceed additional or not is one thing they should determine once they begin the hearings subsequent month.

So, would this determination by Adani, in your opinion, affect different initiatives that the Adani Group has in Sri Lanka? As an example, there may be the ports undertaking, the West Container Terminal.

I don’t imagine there shall be any affect there. They’ve tied up with the John Keells Group in Sri Lanka for this port undertaking, a really respectable firm. We have to contemplate these two initiatives fully individually. The port undertaking is a performed deal, it’s in progress, and I hope it performs nicely. As for the wind power undertaking, we have to introspect: the place did Sri Lanka go unsuitable in negotiating this undertaking? Was it political stress by native politicians, was it corrupt officers, or was it simply dangerous administration and naivety that led to this outrageous value being concluded final yr?

Wind power doesn’t appear to be excessive on the brand new authorities’s precedence checklist as a result of President Dissanayake has spoken about photo voltaic power. I imagine when he visited Delhi, there was an settlement that the 2 sides would cooperate in establishing photo voltaic power farms in Trincomalee. How ought to corporations bidding for a photo voltaic plant go about this in Sri Lanka?

Whether it is open to bids at any stage, I believe that may be a good factor. The fear is when a deal is arrived at with out going by a clear course of, a means of calling for tenders, calling for bids. Sri Lanka and India have an in depth relationship and there’s a justifiable trigger for the Sri Lankan authorities to tie up with Indian corporations for power providers. This makes eminent sense from each a strategic perspective and likewise a political perspective.

India now is among the largest renewable power producers on this planet. So, it makes whole sense for Sri Lanka to tie up with India on this. But it surely ought to be clear. Adani could be the largest, however there are a lot of distributors and suppliers inside India, who’ve this expertise and who’re large-scale producers.

There is no such thing as a purpose for us to not have clear procurement in power buy agreements. So long as the president, as he promised earlier than the election, ensures that power shall be bought by a clear tender course of, he’s on good floor. But when he has a scenario the place he has to signal bilateral energy buy agreements with out going by a clear course of, I believe he’s in grave peril of struggling the reputational disgrace of his predecessors.

So, if Adani Inexperienced Power have been to theoretically become involved within the photo voltaic undertaking in, say, Trincomalee, there could be no objection from Sri Lanka?

Definitely no objection from me or from anybody else fascinated about this from a rational perspective. Final yr we had a brand new electrical energy Act, which requires that energy buy agreements be made by a clear mechanism of aggressive bidding. So long as the Act is adhered to and environmental rules are abided by, why ought to we object? Sri Lanka wants renewable power desperately, and it’s in our curiosity to buy that energy—whether or not from Adani or anybody else—on the lowest attainable value. That’s the problem earlier than us.

Adani Inexperienced was not too long ago indicted by US prosecutors in an alleged bribery case. And there appears to have been a form of spin-off of this in Sri Lanka. Do you assume that is going to affect future involvements with the corporate?

I don’t assume so. I don’t assume the Sri Lankan authorities formally responded to the indictment of Adani Inexperienced Power within the US. The overview of the Adani undertaking, I don’t imagine, had something to do with the US occasions. When President Dissanayake got here to workplace, he determined to overview it, and his Cupboard revoked the sooner Cupboard determination of President Wickremesinghe. Within the meantime, after all, these of us who’ve opposed this undertaking have been vociferously arguing towards it, however on the identical time additionally attempting to be cheap, taking the view that as long as such initiatives are agreed to transparently and abide by Sri Lankan regulation, and particularly its environmental rules, we should not have any objection to this, and certainly we don’t.

So, I believe the US proceedings towards the Adani firm have little or no affect in Sri Lanka. Certainly, there have solely been indictments, and the circumstances haven’t been heard. I imagine these indictments have been issued below the Overseas Corrupt Practices Act and that no proceedings will occur within the US now below the Act, as a result of President Trump has determined that they won’t implement that Act.

So, these circumstances in New York will most likely disappear. And so they haven’t any bearing in anyway, as far as I do know, on the Sri Lankan situation.