The Adani Group Crisis and the Projects in South Asian Nations

At present, the Adani Group either has invested or is in talks to develop infrastructure projects in three South Asian nations: Sri Lanka, Nepal, and Bangladesh.

New Delhi: Amid the crisis in the Adani Group, after US-based short seller Hindenburg Research accused the conglomerate of “pulling off the largest con in corporate history”, several concerns have been raised over the group’s investments in other South Asian nations.

Under India’s ‘Neighbourhood First’ policy, Prime Minister Narendra Modi’s government had promised to offer support to all neighbouring countries for trade and commerce, power and energy, transport and connectivity, science and technology, defence, rivers, and maritime affairs.

Gautam Adani – who was once the world’s third richest person – appeared to have taken the initiative, or been given the opportunity, to fulfil Prime Minister Modi’s promise to the neighbouring countries.

Adani has met with regional leaders, including Bangladesh Prime Minister Sheikh Hasina in September 2022, and then Sri Lankan President Gotabaya Rajapaksa, The Hindu reported. His family members have also met with senior officials from Myanmar and even Indonesia, the report said.

At present, the Adani Group either has invested or is in talks to develop infrastructure projects in three South Asian nations: Sri Lanka, Nepal, and Bangladesh.

However, the fallout of the Hindenburg Research report, which forced the company to shelve a Rs 20,000 crore share sale, and led to the subsequent deterioration in the firm’s market value, has raised questions on whether the setback will affect bilateral ties.

Also read: Many Ingredients Went Into the Adani Stock Price Meltdown

Sri Lanka

In Sri Lanka, Adani Green Energy has invested more than $500 million in two wind projects of 286 MW and 234 MW in Mannar and Pooneryn, respectively. The firm received provisional approval from Sri Lanka in August 2022.

It also has another port project in Colombo – a $700 million West Container Terminal (WCT).

Interestingly, Adani received approval to build WCT after he was pushed out of a 2019 agreement with Japan to develop the East Container Terminal at the Colombo Port.

Whether it’s any deal in Sri Lanka, it’s unclear how Adani became the chosen investor from India. But the billionaire has denied, on several occasions, that he received any favours from Prime Minister Narendra Modi to grow his business.

In June last year, The Wire had reported that the head of Sri Lanka’s electricity authority M.M.C. Ferdinando told the parliament that President Rajapaksa had told him “India’s Prime Minister Modi is pressuring him to hand over the [500 MW renewable energy] project to the Adani Group”.

Samagi Jana Balavegaya, the major opposition party in Sri Lanka, had claimed that the Electricity Act had been amended specifically to favour Adani for the wind power project.

Two days later, Ferdinando retracted his statement and then resigned.

Sri Lanka is reeling under its worst economic crisis since its independence. India has given nearly $4 billion as financial aid and said it will support the island nation through long-term investments.

Officials told The Hindu that the government is watching developments in the wake of the crisis at the Adani Group, after the Hindenburg report. They told the newspaper that they are hoping to see more infrastructure investment from India.


Meanwhile, officials in Nepal are also tracking developments in the Adani issue, the daily reported.

The Adani Group has proposed to lay transmission lines to connect hydropower projects in Nepal to a planned South Asian renewable energy grid. Such a grid would provide power from Nepal and Bhutan to India, Bangladesh, and possibly Sri Lanka in the future, the newspaper said.

Reports say that Adani has shown interest in hydropower projects in the Karnali Basin. Last year, company officials had even visited Nepal for this purpose, however, no announcement has been made yet, possibly due to the change in government, The Hindu reported.


Adani’s 1,600-megawatt coal-fired power plant in Jharkhand’s Godda district has been delayed twice. The thermal plant was due to supply electricity to Bangladesh in January 2022, and then, as per reports, it was expected to start by December 16, 2022.

Now it is expected to start the electricity supply to Bangladesh in March this year.

The delay is due to Bangladesh’s concerns over the “excessive” pricing of the coal to be used in the plant, Moneycontrol reported. The coal will be sourced from the Carmichael coal mine in Australia owned and operated by Adani Power.

The Bangladesh Power Development Board (BPDB) had asked for a revision of the 2017 power purchase agreement, or a discount on the high energy costs, UNB reported.

Almost all the power generated at the plant is meant to be exported to Bangladesh. The cost of the coal, including its transportation, is to be borne by Bangladesh. The price of this coal was to be factored into the power purchase agreement. The high price is reportedly because there is no discount provision for coal in the power purchase agreement.

The plant will significantly augment India’s electricity export to Bangladesh.

An official told Business Today that BPDB found the coal price quoted by Adani Power to be excessive. They had reportedly quoted $400/million tonnes, but it should be less than $50/MT, which is what BPDB is reportedly paying for imported coal at their other thermal power plants.

However, Adani Power told Business Standard that BPDB  has not sought any in the power purchase agreement for the project.

When asked about the Union government’s position on BPDB’s objection to the high coal prices cited by Adani Power, Arindam Bagchi, spokesperson for the Ministry of External Affairs, told Deccan Herald: “I do not think we are involved in this. However, in the past, diplomats had cited this agreement between Adani Power and BPDB as an example of bilateral cooperation between the two nations.

Moneycontrol reported, citing a 2020 Brickwork Ratings report, that the total cost of Adani’s Godda project is approximately Rs 14,817 crore. The cost has been funded in a debt-to-equity ratio of 68:32. The debt of Rs 10,075.42 crore has been raised from REC (50%) and PFC (50%).