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A recent audit report by the National Audit Office has raised concerns over the financial transparency of Sri Lanka’s 500 MW renewable energy project in Mannar and Pooneryn, awarded to India’s Adani Group. The report highlights that while the Sri Lanka Sustainable Energy Authority (SLSEA) had spent Rs. 261.7 million on initial development work, only Rs. 112.5 million has been recovered, leaving an unexplained shortfall of Rs. 149.2 million.
Unaccounted Funds Raise Transparency Issues
The audit report questions why SLSEA failed to recover the full amount it had invested in the early stages of the project. In a letter dated November 8, 2022, the authority formally requested reimbursement of the Rs. 261.7 million spent on preparatory work. However, subsequent financial records show only Rs. 112.5 million was recorded as recoverable, with no clear explanation for the remaining amount.
Lack of Documentation and Accountability
The report further states that no agreements or documentation justifying the reduction of Rs. 149.2 million were provided for audit review. This lack of transparency has raised serious concerns over how the financial adjustments were made and whether due process was followed in negotiations with the Adani Group.
The National Audit Office has recommended that SLSEA immediately disclose any agreements or justifications regarding the financial shortfall. It has also stressed the need for better governance in handling large-scale renewable energy projects, ensuring that public funds are properly accounted for.
Cabinet Approval and Future Implications
The project was officially handed over to Adani Group following Cabinet approval on March 15, 2022. Given the scale of investment and the strategic importance of renewable energy in Sri Lanka’s power sector, the audit findings have sparked fresh debates over accountability, financial management, and transparency in foreign investment projects.
With increasing pressure on Sri Lanka to attract foreign investors while ensuring financial integrity, the government may have to review its policies on project handovers and cost recoveries. The findings from this audit could shape future discussions on how Sri Lanka negotiates and manages large-scale energy investments.
Adani Group’s Troubled Global Track Record
This is not the first time the Adani Group has been at the center of controversy. The conglomerate has been linked to multiple scandals, raising concerns over its integrity and transparency in international business dealings.
Border Security Relaxations for Renewable Energy Project in India
In 2025, reports emerged that India had relaxed security protocols along its border with Pakistan to facilitate an Adani renewable energy project. The decision, met with opposition from military officials, led to allegations of corruption, including accusations of bribery to secure favorable contracts.
London Science Museum Sponsorship Amid Fraud Allegations
Adani’s £4 million sponsorship of London’s Science Museum drew criticism due to its simultaneous involvement in fraud allegations in the U.S. Prosecutors accused the company of paying $250 million in bribes for solar power contracts, leading to public backlash and trustee resignations.
Sri Lankan Wind Power Project Withdrawal
Earlier this year, Adani withdrew from a $1 billion wind power project in Sri Lanka, citing tariff disputes and environmental concerns. The decision fueled further debate about the group’s credibility in handling large-scale infrastructure investments.
Australian Coal Port Loan and Environmental Concerns
Despite opposition from environmentalists and indigenous groups, Adani secured a $330 million loan to refinance debt for its Australian coal port operations. The project remains controversial due to its potential impact on the Great Barrier Reef.
Bribery and Fraud Allegations in U.S. Courts
In late 2024, U.S. prosecutors charged Adani with involvement in a $265 million bribery and fraud scheme linked to solar energy deals. These allegations have intensified scrutiny of the group’s business practices and financial dealings worldwide.
The Need for Stricter Due Diligence on Foreign Investors
The controversies surrounding Adani highlight the critical importance of vetting foreign business partners before awarding large-scale projects. As Sri Lanka continues to seek foreign investments to boost its economy, ensuring financial accountability and transparency should be a top priority.
