The bribery case against the Adani Group in the US has brought the spotlight onto Solar Energy Corporation of India (SECI), a central PSU under the Ministry of New and Renewable Energy. US authorities have alleged that government officials were bribed over $250 million for approving solar power supply agreements with state authorities.
SECI, a premier trader of renewable energy, is a Category-I (highest) Power Trading Licensee for trading power on a pan-India basis. It procures power from successful developers under its tenders and sells to Buying Entities (i.e. DISCOMs) through long-term PPAs and PSAs respectively. The US court document mentions that Adani Group Chairman Gautam S Adani, his nephew Sagar Adani, and six others offered over $250 million in bribes
The entire episode goes back to 2019 after SECI completed the bidding for the then first-of-its-kind combined tender for 12,000 MW of solar electricity generation and 3000 MW of manufacturing of solar panels. Adani Green and US-based Azure Power won it.
However, because of the “high energy prices”, SECI was unable to sign power supply agreements (PSAs) with state electricity distribution companies (DISCOMs) and that is when bribes were paid to Indian government officials to get PSAs with state DISCOMS. Without PSAs, SECI could not sign power purchase agreements (PPAs) with Adani Green and Azure.
According to the US court, “SECI’s inability to find purchasers jeopardised the lucrative LOAs (letter of awards), and corresponding revenue” that was anticipated by the two companies.
It further says that “the co-conspirators undertook extensive efforts to corruptly persuade government officials to cause state electricity distribution companies to execute PSAs”. 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.
News agency Reuters quoted the head of SECI, RP Rupta, saying that there is no basis for the company to investigate the matter.
“As a result, in or about 2020, the defendants Gautam S Adani, Sagar R. Adani, Vneet S Jaain,… among others, devised a scheme to offer, authorize, make, and promise to make bribe payments to Indian government officials in exchange for the government officials causing state electricity distribution companies to enter into PSAs with SECI,” the US district court in New York has alleged.
The Securities and Exchange Commission (SEC)—the American markets regulator—said: “According to industry analysts, Adani Green was projected to earn billions of dollars of revenue and more than a billion dollars in profit by selling power capacity to SECI related to its Letter of Award and Manufacturing Linked Projects. To that point in its corporate history, Adani Green had earned only approximately $50 million in revenue and had not recorded a profit.”
SECI mandate
SECI is the leading CPSU dedicated to developing and expanding renewable energy capacity in India. SECI is one of India’s Renewable Energy Implementing Agencies (REIAs).
The organisation has been facilitating market development and creating an ecosystem for RE by conceiving/prototyping/modeling/policy advocacy with innovative project configurations, such as Solar-Wind hybrid with/without energy storage, Round The Clock (RTC) power supply, RE with assured peak power supply, Firm and Dispatch able RE (FDRE) etc.
Since its inception in 2011, the company has established a pan-India presence in almost all states and Union Territories. SECI was incorporated in the year 2011 as not for profit company (Sec. 25 of Companies Act, 1956) and converted to a commercial company in 2015 (Sec. 3 of Companies Act, 2013).