Adani Solar deal in trouble over Andhra Pradesh's demand for waiver of transmission fees
Three sources who have direct knowledge of this matter say that the main buyer of solar power from Adani Green Energy, the state of Andhra Pradesh in the south, has requested guarantees regarding the waiver of transmission charges.
Federal law mandates the transmission fee which can increase the cost by up to 40%. Therefore, waiving this would be difficult.
Three sources claim that since April, Adani has been sending letters to Andhra Pradesh urging them to start off-taking power in accordance with a 2021 agreement.
Adani Green, the Solar Energy Corporation of India and Andhra Pradesh signed a deal to produce 7,000 megawatts of power from solar energy. The Solar Energy Corporation of India is a government-appointed intermediary, which ensures that parties adhere to their contractual obligations.
Sources said that Adani had stated in its most recent letter that it was prepared to provide 4,312 Megawatts of solar energy to the state. The sources asked to remain anonymous because they weren't authorised to publicly speak about the issue.
WOULD A WAIVER DEMAND BREAK THE DEAL?
Three sources claim that Andhra Pradesh - ruled by an ally of Narendra Modi - told Solar Energy Corporation of India in its initial response of September 2, it would not start offtaking until this intermediary provided a waiver of interstate transmission for the entire 25-year contract.
Sources said that without the waiver the cost of solar energy to the Indian government will increase to almost 3,49 rupees from 2,49 rupees.
One of them claimed that the deal was in danger because the government’s solar corporation wasn’t able to grant or guarantee a transmission waiver.
Adani Green, Solar Corporation and the State Chief Minister's Office did not respond to emails asking for comment on the letters. The details of the letters were not previously reported.
US BRIBERY ACCUSATIONS In November of last year, U.S. officials accused Indian billionaire Gautam Adiani, along with his nephew, and other executives, for their involvement in a $265-million bribery plan to secure Indian electricity supply contracts in Andhra Pradesh. The Adani Group rejects the allegations. Adani denied wrongdoing to shareholders in June by telling them that no one from the Adani Group had been charged with violating the U.S. Foreign Corrupt Practices Act. The accusations caused political outrage in India as the opposition accused Modi's government of shielding Adani, his conglomerate that spans coal mines, ports, airports and media.
India's opposition parties called for an investigation of the Adani Group in response to the U.S. allegations of bribery, but Indian regulators are yet to act. Reports in December indicated that Andhra Pradesh had approved the solar deal against official advice.
(source: Reuters)
