The logo of the Adani Group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021.

India's Adani Green Energy (ADNA.NS), said it will withdraw from two proposed wind power projects in Sri Lanka, according to a letter sent by the company to a Sri Lankan government agency.

The Sri Lankan government said last month it has started talks with the Adani Group to lower the cost of power from the projects estimated to cost a total of $1 billion.

"It was learnt that another Cabinet appointed negotiations committee and Project Committee would be constituted to renegotiate the project proposal," the company wrote in a letter, a copy of which was seen, addressed to the chairman of Sri Lanka's Board of Investment.

"This aspect was deliberated at the Board of our company and it was decided that while the company fully respects the sovereign rights of Sri Lanka and its choices, it would respectfully withdraw from the said project," the letter, dated February 12, said.

Sri Lanka's Board of Investment declined to comment while the power ministry secretary could not be reached immediately. Adani did not respond immediately to a request for comment.

Sri Lanka started reviewing the Adani Group's local projects after U.S. authorities in November accused its billionaire founder Gautam Adani and other executives of being part of a scheme to pay bribes to secure Indian power supply contracts.

Adani has denied the allegations.

Under the deal with Sri Lanka, Adani Green was to build two wind power projects in Mannar town and Pooneryn village, both located in the northern province of the South Asian island nation.

The Adani Group is also involved in building a $700 million terminal project at Sri Lanka's largest port in Colombo.

Cash-strapped Sri Lanka, which suffered from crippling power blackouts and fuel shortages during an economic crisis in 2022, has been trying to fast-track renewable energy projects to hedge against surges in imported fuel costs.

by Reuters