The indictment by United States prosecutors against Adani Group chairperson Gautam Adani and seven executives of his conglomerate and a firm named Azure Power that was made public on Wednesday does not name any officials to whom the defendants allegedly paid bribes totalling Rs 2,029 crore, approximately $265 million.
As the indictment alleged, these supply contracts with the Indian government were projected to generate more than $2 billion in profits after tax over an approximately 20-year period.
However, as Scroll and another news outlets have reported, a complaint by the United States Securities and Exchange Commission claims that one of the officials that Gautam Adani met on September 12, 2021, to discuss “incentives” needed to ensure that Andhra Pradesh entered into a power sale agreement was the state’s chief minister – the post was then held by the YSR Congress Party’s YS Jagan Mohan Reddy.
The bribe that the companies allegedly offered to “officials in Andhra Pradesh” was Rs 1,750 crore, more than three-quarters of the total amount allegedly paid to all the states together.
Though the indictment document and the complaint of the US market regulator do not name officials who allegedly recieved bribes, the documents contain significant details about the agreements that four states and one Union territory entered into between July 2021 and February 2022. These deals, it claims, came after bribes were offered or paid to officials in these states.
In addition to Andhra Pradesh, these were Odisha, then ruled by the Biju Janata Dal; Chhattisgarh, then ruled by the the Indian National Congress; Tamil Nadu, then ruled by the Dravida Munnetra Kazhaga; and Jammu and Kashmir, which was under Central rule at the time.
Scroll scrutinised documents of state electricity regulatory commissions and the Central Electricity Regulatory Commission for records of agreements between state distribution companies and the entities named by the US Department of Justice. These records showed that each of these states and the Union territory had during the specified period signed agreements with the Solar Energy Corporation of India, which in turn signed agreements with Adani and Azure.
Scroll emailed the state distribution companies to ask if there was any connection between these deals and the allegations of bribery against state officials during the period. This story will be updated if they respond.
SECI, Adani and Azure
The Solar Energy Corporation of India is a government company that implements energy projects across India on behalf of the ministry of new and renewable energy. Among its primary functions is to serve as an intermediary between project developers and state electricity distribution companies. The SECI buys power from the project developers such as companies like Adani Green Energy and sells it to distribution companies.
The events that led up to the US indictment can be traced back to 2019, when the SECI invited bids through a “request for selection” from companies that were interested in setting up facilities in India that could manufacture solar power system components to generate 3 gigawatts of power. As part of the agreement, the SECI would buy up to 12 GW of solar power capacity from the developers.
Azure and Adani Green Energy won the bid. Under the agreements with the two companies, the SECI would purchase 4 gigawatts of power from Azure and 8 gigawatts from Adani.
Following this, as the Securities and Exchange Commission complaint notes, at least “two additional contractual steps were required”.
First, the SECI would have to enter into power sale agreements with state distribution companies, under which they would buy power at rates “consistent with those SECI had agreed to pay Azure and Adani Green”. Next, the SECI would have to enter into power purchase agreements with Adani Green and Azure.
But the complaint notes that state distribution companies were hesitant to sign sale agreements with the SECI, because “the price SECI accepted for Azure and Adani Green … turned out to be too high”.
The complaint alleges that “their refusals were overcome only when Azure and Adani Green, acting through various senior executives and officials, paid or promised to pay, in aggregate, hundreds of millions of dollars of bribes to state government officials in India”.
The Andhra Pradesh agreement
The indictment claims that that Gautam Adani met with a high-ranking government official of Andhra Pradesh three times, in August, September and November 2021.
It alleges that Adani and others offered Rs 1,750 crore to this official in exchange for the official “causing Andhra Pradesh’s state electricity distribution companies to agree to purchase seven gigawatts of solar power from SECI”.
Further it notes that the state’s electricity distribution companies entered into a power supply agreement with the SECI, under which it would purchase “approximately seven gigawatts of solar power – by far the largest amount of any Indian state or region”.
This is reflected in agreements that the state’s distribution companies entered into later that year. According to records of the Central Electricity Regulatory Commission, on December 1, 2021, an agreement was signed between the SECI and three Andhra Pradesh electricity distribution companies – Andhra Pradesh Southern Power Distribution Corporation, Andhra Pradesh Eastern Power Distribution Corporation and Andhra Pradesh Central Power Distribution Corporation.
Under this agreement, the distribution companies were to receive the total of 7 gigawatts of solar power in three tranches – 3,000 megawatts in 2024, 3,000 megawatts in 2025, and 1,000 megawatts in 2026. The state government planned to supply this solar power to the agriculture sector free for nine hours daily.
The same year, the Communist Party of India leader K Ramakrishna filed a writ petition in the Andhra Pradesh High Court against the procurement of this power from theSECI, contending that the price the state had agreed to pay, Rs 2.49 per unit, was too high, and that solar power was available for less than Rs 2 per unit in the open market.
Agreements with other states
The indictment alleges, “Following the promise of bribes to Indian government officials, in or about and between July 2021 and February 2022, electricity distribution companies for the states and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh” entered into power sale agreements with the SECI.
Scroll identified the following agreements that the states and union territory signed with SECI within this time period.
The first of them was signed on July 23, 2021, between the Grid Corporation of Odisha and SECI. Under it, the Odisha company would buy 500 megawatts of solar power from SECI. The solar corporation announced the agreement on X.
Next, on August 12, the Chhattisgarh State Power Distribution Company signed a power sale agreement, under which it would buy 300 megawatts of solar power from the solar energy corporation at a rate of Rs 2.54 per unit, measured in kilowatt-hours.
The following month, on September 17, the Tamil Nadu Generation and Distribution Corporation signed a power supply agreement with the SECI, under which the latter would supply the former with 1,000 megawatts of solar power. The solar energy corporation announced the agreement on X. The purchase was intended to meet the state corporation’s obligations, set by the state’s electricity regulatory authority, that a certain quantum of the energy it purchased be renewable energy.
Early the next year, on February 10, 2022, the SECI signed an agreement with the Jammu and Kashmir Power Development Corporation, under which it would supply the state company with 100 megawatts of solar power at the rate of Rs 2.61 per unit.
The next month, on March 7, the SECI signed an agreement with Adani Green and Azure Power to purchase power from the corporations to sell to the Jammu and Kashmir Power Development Corporation.
Safwat Zargar contributed reporting from Srinagar.
