New Delhi

The charges levelled against Gautam Adani and his executives by the US Securities and Exchange Commission (SEC) and a New York district court for bribing Indian government officials in lieu of lucrative solar power contracts can adversely impact foreign fund raising plans.

Sources said the “serious charges” against Adani group can create roadblocks in raising funds for its flagship Khavda project and solar PV manufacturing facility at Mundra in Gujarat, which are involved in the manufacturing-linked solar tender under fire from the US prosecutors.

Adani Green Energy (AGEL), the RE arm of Adani Group that has been named by the US prosecutors, signed the power purchase agreement (PPA) with State-run Solar Energy Corporation of India (SECI) to supply 8,000 megawatt (MW) of solar power.

All PPAs related to this tender were signed by December 2023. The tender was awarded to AGEL in June 2020.

A senior government official said that as part of the agreement, some power is being supplied from Adani’s Khavda solar park in Gujarat and from its facilities in Rajasthan. Besides, the manufacturing is being done at its solar PV cell and module manufacturing plant in Mundra (Gujarat) through Mundra Solar Energy (MSEL).

“With the US Court indictment and the SEC investigation, Adani Group is likely to face difficulties in raising foreign funds for these two projects. They will face stricter scrutiny from global investors, which can lead to higher borrowing costs and subsequently impact expansion plans,” the official explained.

SECI in its FY23 annual report gives details of the tender including PPAs of 9,000 MW that were signed up to March 31, 2023 (8,900 MW as on March 31, 2022).

What is further casting a shadow on these projects are two PIL’s that were filed in the Andhra Pradesh High Court for quashing the Solar PV Power Plant linked with manufacturing facility Tender floated by SECI and cancellation of procurement of 7,000 MW power by AP Discoms.

“The matter is pending for hearing before High Court of Andhra Pradesh. If any adverse order is passed by High Court of Andhra Pradesh then this tender will be terminated and will result in cancellation of PPA and PSA. SECI will have to refund the Success fee of ₹9,600 lakh collected for Scheme,” said SECI in its FY2023 annual report.

Sources said that Andhra Pradesh has signed the power supply agreement (PSA) with SECI for 7,000 MW at a tariff of around ₹2.42 per kwh.

The court order states that on December 16, 2021, Azure signed PPAs with SECI for 2.3 gigawatts (GW) of power mapped to Andhra Pradesh.

“We are aware of the actions announced by the US Department of Justice and US Securities & Exchange Commission against certain former directors and officers of Azure, as well as certain third parties. As we initially disclosed in January 2023 and in subsequent filings and annual reports, we have been cooperating with those agencies in relation to those and other matters and we will continue to do so. The former directors and officers of Azure referenced in the US Department of Justice and US Securities and Exchange Commission actions have been separated from Azure for more than a year. Azure is committed to operating with strong governance standards in its mission to provide clean energy solutions. We have no further comment at this time.”

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