Addressing criticism about the role of renewable energy (RE) projects, the State-run Solar Energy Corporation of India (SECI) says the bidders can reduce tariffs voluntarily after the bidding. This is the first time after its tendered project has become a bone of contention in the Adani bribe controversy, SECI says a bidder of any project can lower the discovered tariff after the bidding process if it can't find takers for power sale at a higher rate.
SECI is one of the four government-designated renewable energy implementing agencies (REIAs). SECI and other REIAs float tenders as per the bidding trajectory allocated by the Union ministry of new and renewable energy (MNRE) using a transparent electronic bidding method wherein all private and public parties are allowed to participate.
In a
statement, SECI says, "After the e-bidding and e-reverse auction process, lowest tariffs are discovered and capacity is offered to power distributing companies (DISCOMs) across India for procurement of power. The same is also put up on SECI's official website to enable various DISCOMs to avail the capacity at the discovered tariff. The DISCOMs, then approach SECI with their requirement of RE power. One bid normally consists of multiple developers and buyers. In some cases, bidders also suo-moto reduce the discovered tariff if subsequent to bidding process, tariff have come down and no DISCOM is willing to buy at the discovered tariff."
In 2022, Adani Green Energy Ltd (AGEL) and Azure Power Global Ltd suo-motu reduced the discovered tariffs in the tender floated by SECI to Rs2.54 per Kilowatt-hour (kWh) and Rs2.42 per kWh from Rs2.92 per kWh. The lower tariff in the tender was also approved by the Central Electricity Regulatory Commission (CERC).
Post-project commissioning, SECI says, as an intermediary power trader, it procures the electricity generated by the projects and, in turn, sells it to the DISCOMs as per terms of the power purchase agreement (PPA) and power sale agreement (PSA), respectively.
Further, the State-run company says, due to its higher credit rating, developers are able to arrange better financing options which improves a project's viability. "Due to the presence of SECI as contractual counterparty, lower RE tariffs are discovered which ultimately benefit the end consumer. SECI has never defaulted on its payment commitments to project developers even when there is delay in receipt of payments from DISCOMs."
SECI has awarded tenders for RE projects for over 70 gigawatt (GW).
Last week, the US Securities and Exchange Commission (SEC) summoned Adani group chief Gautam Adani and his nephew Sagar, alleging their involvement in a US$265mn (million) bribery scheme.
According to the SEC complaint, Azure Power, another stakeholder in the projects, is accused of collaborating with AGEL. The SEC alleges that Azure Power contributed to the bribes by transferring its rights to lucrative portions of the Andhra Pradesh projects to Adani Green. These transactions, the SEC claims, were structured to obscure the financial exchanges tied to the bribes.
In 2021, AGEL raised US$750mn through bond offerings, with US$175mn sourced from US investors. The SEC claims that offering materials, signed by Gautam and Sagar Adani, misrepresented the company's compliance with anti-bribery and anti-corruption policies. The bond documents highlighted Adani Green's adherence to ESG (environmental, social, and governance) principles and anti-corruption standards, which were instrumental in attracting investments from ESG-focused stakeholders. However, the SEC alleges that during this period, the defendants were actively bribing officials, undermining the ethical narrative presented to investors.
In parallel, the US Attorney's Office for the Eastern District of New York has filed criminal charges against Gautam and Sagar Adani, Cyril Cabanes of Azure Power, and others. These charges include securities and wire fraud and violations of the Foreign Corrupt Practices Act (FCPA).
The Adani group has vehemently denied the allegations made by the US department of justice and the SEC against directors of Adani Green, terming them 'baseless'.
