India's Adani Green Energy has told Sri Lanka it will withdraw from two proposed wind power projects, the company said on Thursday, two weeks after Colombo said it was seeking to lower the cost of the power generated.

The company was to invest a total of USD 1 billion in generating electricity from wind at two projects and laying transmitting lines to take it to users.

Adani Green Energy Ltd. has withdrawn from building two wind power projects in Sri Lanka after the new government sought lower tariffs last month, in the latest setback to the Gautam Adani-led conglomerate’s overseas ambitions.

Following this announcement, Adani Green Energy's shares gained 2 per cent in the stock market and were trading at Rs 921 at the time of filing this report. The stock movement suggests that investors have reacted positively to the company's decision.

Adani Green Energy Ltd told Sri Lanka’s Board of Investment on Wednesday that it would “respectfully withdraw” from the wind project following discussions with officials who indicated that fresh committees would be formed to “renegotiate the project proposal”.

India's Adani Green Energy 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 proposed wind projects in Mannar and Pooneryn, including transmission lines would have resulted in a $1 billion investment for Sri Lanka if it had happened.