New Delhi: The solar sector is facing a major crisis after the US charged Adani Group and Azure Power with bribery. The allegations have sparked widespread concern, with industry experts warning of a severe backlash against India.
Industry stakeholders are worried about the impact on financing solar projects, with some predicting higher interest rates due to increased scrutiny. The role of Solar Energy Corporation of India (SECI) in tendering projects has also come under question, Business Standard reported.
A 12-gigawatt solar power project, auctioned by the SECI and wholly-owned subsidiary of the Ministry of New and Renewable Energy, is at the center of the controversy. Adani Green and Azure Power were the only two winners of the project, with bids of Rs 2.92 per unit. However, when SECI couldn’t find a buyer, the companies allegedly offered bribes to several states, including Andhra Pradesh, which agreed to buy power at a lower tariff of Rs 2.49 per unit.
“SECI LoA [Letter of Allocation] was the gold standard. Given that it is a sovereign backed assured off taker, domestic and global financing agencies relied on its face value. But with recent events where the role of SECI seems to have become clouded, there would now be a higher rate of scrutiny. We fear the rate of interest also going up,” said a senior executive of a leading energy company,” a senior executive of a leading energy company told BS.
Also read: Adani US Indictment: Jagan Reddy Under Fire Over ‘Foreign Official #1’ for Rs 1,750-Crore Bribe
The controversy has sparked calls for reform in the tendering process. Sunil Jain, chairman of the Skill Council for Green Jobs, suggests abolishing reverse bidding and adopting a ‘contract for difference’ auction model. This would allow for more flexible pricing and help factor in instability in power prices and input costs, the report added.
The Securities and Exchange Commission and the US Attorney’s Office for the Eastern District of New York have charged billionaire industrialist Gautam Adani over his alleged role in what they have called a “massive bribery scheme.” The Adani Group has called the charges “baseless” and denied them.
