A ‘bribery scheme’ to bag lucrative solar power contracts

Indictment details Adani bribery scheme to secure solar power contracts, involving Adani Green Energy and Azure Power executives.

The indictment of industrialist Gautam Adani and his business associates by the U.S. Department of Justice (DoJ) presents detailed allegations regarding the processes followed by senior executives of Adani Green Energy Ltd. and Azure Power Global Ltd. (a renewable energy company headquartered in New Delhi, which used to be listed on the New York stock exchange) to bribe Indian government officials and secure lucrative solar power contracts.

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The indictment starts by explaining the alleged motivation for their resort to a bribery scheme. Between December 2019 and July 2020, Azure Power and a subsidiary of Adani Green Energy won, and were issued, letters of award (LOAs) for a manufacturing-linked solar tender offered by the Solar Energy Corporation of India (SECI), a company of the Union Ministry of New and Renewable Energy whose mission is to increase the use of renewable energy in India.

As part of this award, Azure Power and Adani Green’s subsidiary would supply 4 GW and 8 GW of solar power, respectively, to the SECI, which would buy it at a fixed rate. The SECI, in turn, had to find State electricity distribution companies (discoms) that would purchase this 12 GW of solar power. This award, at the time, constituted one of the largest solar energy projects in the world. Azure Power projected that it would earn after-tax profits of $2 billion over 20 years.

However, “the high energy prices” set out in the LOA made it impossible for the SECI to find buyers, thus jeopardising the “lucrative LOAs and corresponding revenue”, notes the indictment.

As a result, “Gautam S. Adani, Sagar R Adani [Gautam’s nephew and executive director of Adani Green Energy], Vneet S Jaain [former CEO of Adani Green Energy], Ranjit Gupta [former CEO of Azure Power Global]… among others, devised a scheme to offer, authorise, make and promise to make bribe payments to Indian government officials” in exchange for the said officials getting the State discoms to enter into PSAs (power sale agreements) with the SECI.

The PSAs would then allow Adani Green and Azure Power to secure PPAs (power purchase agreements) with the SECI. It was agreed that Azure Power “would pay for a portion of the promised bribes”.