Adani-Andhra deal, under bribery scrutiny, was approved against officials' advice
What's the story
The Andhra Pradesh government is facing flak for approving a massive solar contract with Adani Green, despite warnings from financial and energy officials.
The deal, which could cost the state over $490 million annually, is now being probed by US prosecutors for potential bribery.
The Solar Energy Corporation of India (SECI) had presented this proposal for India's largest renewables contract on September 15, 2021.
This came despite the state's energy regulator previously stating no immediate need for solar power.
Deal details
Rapid approval and financial concerns
The state cabinet, headed by Chief Minister YS Jagan Mohan Reddy, gave preliminary approval for the deal a day after SECI's proposal.
By November 11, the energy regulator had approved the 7,000 megawatt deal and on December 1, a procurement agreement was signed with SECI.
Documents reveal that 97% of the contract's value (~$490 million annually) would go to Adani Green, as reported by Reuters.
This rapid approval process and the significant allocation to Adani have raised eyebrows.
Legal investigation
Allegations of bribery and misleading investors
US prosecutors allege that $228 million was offered to an unnamed Andhra Pradesh official to influence electricity purchases from Adani Green.
The US indictment accuses Gautam Adani of bribery to secure contracts and misleading investors through fraudulent disclosures.
Reuters's investigation reveals how Andhra government overruled the advice of finance and energy officials to approve the deal with Adani.
Some officials have raised concerns that taxpayers could be burdened with paying for thousands of megawatts of energy the state doesn't need.
Reactions
Adani Group dismisses charges, Andhra Pradesh seeks suspension
The Adani Group has dismissed these charges as "baseless" and plans to address them legally.
If extradition is sought, it will involve presenting evidence under the India-US extradition treaty framework.
Meanwhile, the new Andhra Pradesh government, headed by Chandrababu Naidu, is now seeking to suspend the deal following Adani's indictment in the US.
Union Home Minister Amit Shah recently said the government would act on the bribery case once "we have documents," emphasizing it doesn't work on media reports.