The role of Solar Energy Corporation of India (SECI) has come in question after the US court order over bribery allegations on Gautam Adani revealed that SECI facilitated his company’s contracts with the State electricity boards despite high price of the power.

A New York court has charged Gautam Adani for alleged involvement to pay around $265 million (roughly ₹2,029 crore), bribe to State government officials in India for favourable terms in solar power purchase contracts. The court order said that the officials in Adani’s companies “secretly influenced” SECI.

“The defendants Sagar R Adani, Vneet S Jaain and other Indian Energy Company personnel secretly influenced the SECI process for reallocation of the 2.3 GW PPAs to the Indian Energy Company’s subsidiary, including by directing the US issuer’s admissions to SECI and by obtaining and revising internal SECI documents,” the court document stated.

On his part, SECI CMD RK Gupta in an interaction with the media said: “SECI will not be reviewing the order or initiating a probe on the issue now as there is no basis for that. There is no document with us other than the order... I have heard of it only from the media. Further, I am not sure whether any norms have been violated and if anybody has been named in the order.”

The court order

Meanwhile, the New York court order elaborated the role of the SECI.

“Between December 2019 and July 2020, the US issuer and the Indian Energy Company’s subsidiary won and were issued letters of award (LoAs) for a manufacturing-linked solar tender offered by SECI. As part of the award, the US issuer agreed to supply 4 GW of solar power to SECI, and the Indian Energy Company’s subsidiary agreed to supply 8 GW of solar power to SECI,” the order said.

“SECI, in turn, was responsible for finding the State electricity distribution companies that would purchase the 12 gigawatts (GW) of power that the Indian Energy Company’s subsidiary and the US issuer has agreed to supply.”

The terms of the LoAs obligated SECI to purchase solar power from the US issuer and the Indian Energy Company’s subsidiaries at a fixed rate, it added.

Between 2019 and 2020, the SECI awarded tenders to the Adani Group and Azure Power to supply 12 GW of solar power at a specified price. The SECI needed to find State power companies that would be willing to buy electricity at that price. When the SECI was unable to find State-owned buyers because of the high price of power, the Adani firm and Azure Power bribed officials in different State governments to get State companies to enter into power sale agreements with the SECI. This would enable the central government firm to sign power purchase agreements with them. 

“The high energy prices contemplated in the LoAs made it difficult for SECI to find Indian State buyers of energy under the Manufacturing Linked Project. After the award, SECI unsuccessfully sought out Indian State and union governments to purchase the 12 GW of solar power pursuant to PSAs,” the court order said.

‘The Bribery Scheme’

Without PSAs to sell the energy to a State buyer, SECI would not enter into corresponding PPAs to purchase power from the Indian Energy Company’s subsidiaries or the US issuer, it pointed out.

“SECI’s inability to find purchasers jeopardised the lucrative LOAs and corresponding revenue, that the Indian Energy Company’s subsidiary and the US issuer anticipated receiving from the Manufacturing Linked Project,” the order said.

As a result, in or about 2020, the defendants Gautam S Adani, Sagar R Adani, Vneet S Jaain, Ranjit Gupta and Co-Conspirator #2, among others, devised a scheme to offer, authorise, make and promise to make bribe payments to Indian government officials in exchange for the government officials causing State electricity distribution companies to enter into PSAs with SECI, which would allow the Indian Energy Company’s subsidiaries and the US Issuer to secure PPAs with SECI (“Bribery Scheme”).

Gupta and Co-Conspirator #2 agreed that the US issuer would pay for a portion of the promised bribes, the order said.

PSAs with States

The document says SECI entered into power supply agreements (PSAs) with Jammu & Kashmir, Andhra Pradesh, Odisha, Chhattisgarh and Tamil Nadu between July 2021 and December 2021.

Subsequently, around October 2021 and February 2022, the US issuer and the Indian Energy Company, through subsidiaries, executed power purchase agreements (PPAs) with SECI.

Another incriminating point is that the court documents reveal that it was decided that the US issuer will return the 2.3 GWs of PPAs to SECI as a way to transfer value to the Indian Energy Company to satisfy a portion of the US issuer’s bribes.

The conspirators claimed that the need to return the 2.3 GW was based on the “then ongoing litigation regarding the project and deteriorating economies, which reasons were meant to obfuscate the true reason the US issuer was returning the projects to SECI”.

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