SECI link to Adani bribe, fraud probe: What put India's solar power nodal agency in the dock?

The Solar Energy Corporation of India (SECI) has found itself at the centre of a huge controversy in the wake of the probe that the US has launched into some of Adani’s dealings. As per allegations made by the US Justice Department, officials were paid more than $250 million in bribes to okay solar deals with state govts. Adani Group Chairman Gautam S Adani, his nephew Sagar Adani, and six others have been charged with paying these bribes.

It may be mentioned here that SECI is the the nodal agency and a top trader of renewable energy in India. It holds the highest trading license. The company buys power from developers. It acquires this power through its tendering process. SECI then sells this power to electricity distribution companies. These sales happen through long-term agreements. SECI buys power from renewable energy project developers chosen through competitive bidding. They then sell this power to electricity distribution companies (DISCOMs) through long-term agreements known as Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs).

Where it all began

As per the case files, a 2019 solar energy project, totaling 15,000 megawatts (12,000 MW of solar power generation and 3000 MW of solar panel manufacturing), faces allegations of bribery. SECI selected Adani Green and Azure Power to develop the project, which included both solar panel manufacturing and electricity generation.

However, disagreements over pricing stalled the project. SECI was unable to secure agreements with state electricity distributors due to “high energy prices”. This prevented the signing of final agreements with Adani Green and Azure Power. Allegations have now surfaced claiming that bribes were offered to Indian government officials to advance the project despite the pricing disputes.

The US court documents say that “SECI’s inability to find purchasers jeopardised the lucrative LOAs (letter of awards), and corresponding revenue”, which the Adani Green and Azure Power “anticipated”.

Serious allegations

“The co-conspirators undertook extensive efforts to corruptly persuade government officials to cause state electricity distribution companies to execute PSAs,” the document further states.The US prosecutors alleged that Gautam Adani personally met with an unnamed government official in Andhra Pradesh to advance the execution of a PSA between SECI and Andhra Pradesh’s state electricity DISCOMs, for which roughly Rs 1,750 crore was offered to the unnamed official.The Adani Group has denied the allegations and said it will seek legal recourse. “The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty,” the company said in a statement.

A tale of many suspect pacts

According to US prosecutors’ document, SECI, which originally awarded the solar manufacturing-linked power tender, entered into the sale agreements with Andhra Pradesh, Odisha, Chhattisgarh, and Tamil Nadu between July 2021 and December 2021.

The indictment also names New Delhi-based Azure Power, which had won a similar tender for supply of 4 GW.

But when Azure could not cough up its one-third share of the bribe money paid to the states for buying expensive power, Adani made the firm give up part of its contract, which was then taken over by Adani through SECI, a PTI report said.