Indian billionaire Gautam Adani.
| Photo Credit: Reuters

An Indian government agency charged with promoting renewable energy has changed the way it issues power tenders to reduce the risk of corruption after U.S. allegations of bribery in some tenders, said an official with direct knowledge of the matter.

The Solar Energy Corporation of India (SECI) earns commission for linking renewable energy producers with buyers. It was an intermediary in solar power deals involving Adani Group and several states where U.S. authorities have said bribes were paid to unidentified officials between 2021 and 2022.

Gautam Adani indictment: In-depth coverage

The ports-to-power Adani Group has denied the allegations, calling them baseless.

U.S. authorities have not accused SECI of any wrongdoing.

SECI, which selects renewable energy producers for projects through bids and then signs deals with power buyers, said last month it had “no basis so far” to investigate the allegations and that it was “not clear if any of SECI’s covenants have been violated”.

About 75% of SECI’s new bids for renewable power will now be based on specific demand from states instead of the earlier practice of mainly seeking power suppliers first through tenders and then approaching buyers, said the SECI official, who did not want to be named, citing the sensitivity of the matter.

A spokesperson for SECI did not immediately respond to a request for comment outside regular business hours on Monday.

The official said the earlier practice, which used to account for about 90% of the bids, had raised the risk of corruption by power producers seeking to influence buyers in states to sign up to deals even if they did not need the power. The official did not name any companies or give any examples.

The source said SECI had not found any reason to independently investigate any deals it had been part of and that no agency within India or outside had reached out to it.

The allegations against the Adani Group, nevertheless, could temporarily cut foreign investments in India’s renewable sector, said the source, adding that SECI expected tendering to slow down for the rest of the fiscal year that ends on March 31.

Also Read | The return of the Adani solar beam 

SECI’s target for this fiscal year was to find bidders for 15 gigawatts (GW) of power, but it has managed only about 6-7 GW so far.

India is still more than 10% short of its pledge to add 175 GW of renewable power by 2022. It wants to reach 500 GW by 2030.

Representational view of the Colombo main port
| Photo Credit: Reuters

Billionaire Gautam Adani-led conglomerate on Tuesday (December 11, 2024) said it will use its own resources to fund a Sri Lankan port project and not seek U.S. funding.

In an exchange filing late on Tuesday, Adani Ports and SEZ Ltd said the project “is on track for commissioning by early next year” and added that the company will fund the ongoing project through “internal accruals”, aligning with its capital management strategy.

The company said it has withdrawn its 2023 “request for financing from the U.S. International Development Finance Corporation (DFC)”.

In November 2023, the U.S. International Development Finance Corp agreed to provide a $553 million loan to support the development, construction, and operation of a deep-water container terminal called the Colombo West International Terminal (CWIT) at the Port of Colombo in Sri Lanka.

The CWIT is being developed by a consortium of Adani Ports, Sri Lankan conglomerate John Keells Holdings Plc, and the Sri Lanka Ports Authority (SLPA).

DFC financing was part of the U.S. government’s broader efforts to counter China’s growing influence in the region and was seen as an endorsement of Adani’s ability to develop world-class infrastructure.

Loan process stalled

However, the loan process stalled after the DFC asked that the agreement between Adani and the SLPA be amended to align with their conditions, which then went under review by Sri Lanka’s Attorney General. As the project is nearing completion, Adani Ports, which holds 51% of the venture, chose to proceed with the project without funding from the DFC, officials privy to the process explained.

The U.S. agency had recently stated that it was “actively assessing the ramifications” of the bribery allegations against the Adani group executives. It had so far not disbursed any money to the ports-to-energy conglomerate.

Last month, the U.S. Department of Justice charged the Adani group’s founder chairman Gautam Adani, and seven others over allegedly conspiring to pay $265 million in bribes to Indian officials to secure lucrative solar power supply contracts that were expected to yield $2 billion in profits over 20 years.

Adani group has denied all charges as baseless and vowed to pursue all possible legal recourse.

Busiest port in Indian Ocean

The Port of Colombo is the largest and busiest transhipment port in the Indian Ocean. It has been operating at more than 90% utilisation since 2021, signalling its need for additional capacity.

The geopolitically sensitive port project in Sri Lanka is as much of a move by the U.S. to counter Chinese influence in the island nation.

Phase 1 of the project is scheduled to become commercially operational by Q1 2025.

The new terminal will cater to growing economies in the Bay of Bengal, taking advantage of Sri Lanka’s prime position on major shipping routes and its proximity to these expanding markets.

The Colombo West International Terminal (CWIT) project was initiated in September 2021, when Adani Ports signed an agreement with the Sri Lanka Ports Authority and Sri Lankan conglomerate John Keells Holdings, pledging over $700 million to expand the capabilities of Colombo Port.

The CWIT will be Sri Lanka’s largest and deepest container terminal, with a quay length of 1,400 metres and an alongside depth of 20 metres. When complete, the terminal will be able to handle Ultra Large Container Vessels (ULCVs) with capacities of 24,000 TEUs and is expected to have an annual handling capacity of over 3.2 million TEUs.

As of September 30, 2024, Adani Ports had approximately $1.1 billion (₹8,893 crore) in cash reserves and generated an operating profit of $2.3 billion (₹18,846 crore) in the past 12 months.

Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023.
| Photo Credit: Reuters

Asserting that the relationship between India and the U.S. is built on a strong foundation, the White House has expressed confidence that it can navigate the ongoing crisis surrounding bribery charges against Indian billionaire Gautam Adani.

At her daily news conference, White House Press Secretary Karine Jean-Pierre told reporters on Thursday (November 21, 2024) that the administration is aware of the charges against Mr. Adani.

Mr. Adani has been charged by U.S. prosecutors for allegedly being part of a scheme to pay over $250 million (about ₹2,100 crore) bribe to Indian officials in exchange for favourable terms for solar power contracts.

“Obviously we’re aware of these allegations, and I would have to refer you to the SEC [Securities and Exchange Commission] and DOJ [Department of Justice] about the specifics of those allegations against the Adani Group,” she said.    

“What I will say is on the U.S. and India relationship, we believe that it stands on an extremely strong foundation anchored in ties between our people and cooperation across a full range of global issues,” Ms. Jean-Pierre said.

“What we believe and we’re confident about is that we’ll continue to navigate this issue as we have with other issues that may have come up as you just stated. And so the specifics of this, this is something that the SEC and DOJ can speak to directly, but again, we believe that…this relationship between India and the U.S. has been built on a strong foundation,” the Press Secretary said.