The international news agency Reuters has exposed that the then Jaganmohan Reddy government had ignored the suggestions made by officials that the solar power purchase agreement with Adani was not good at all and would cause a huge loss to the exchequer.
In an exclusive story, it said that the process of contacting the state government, giving the seal of approval to the power purchase and the green signal from APERC, all happened with extraordinary speed.
It warned that if Adani continues with the agreement, the state government will have to pay an amount equivalent to the amount spent on social security and nutrition every year. It revealed that the procedure followed by the Solar Energy Corporation of India (SEKI) on September 15, 2021 was very unclear.
It stated that two years earlier, the APERC had said that the state had no short-term solar power needs in the next 10 years and should focus on other renewable energy sources that could provide 24-hour power. However, the state cabinet approved the deal the day after SECI approached the government, according to cabinet records reviewed by Reuters.
By November 11, the state government had received approval for the power purchase agreement from the APERC. Officials signed the agreement on December 1. Its annual value is expected to reach $490 million in the future. According to contract documents reviewed by Reuters, 97% of the deal value will go to Adani Green, part of the Adani Group.
After SECI approached the state government for the 7,000-megawatt purchase agreement, it took just 57 days for the APERC to approve it. The pace was unusual, a former state electricity regulator official and energy legal expert told Reuters. Many experts confessed that the state’s political leadership had ignored advice and suggestions from the finance and power departments in approving the massive deal.
They said Andhra Pradesh would have to pay for thousands of megawatts of electricity that it did not need. Seven more executives were charged in November with bribery and securities fraud, involving several states and a union territory.
US prosecutors have alleged that the defendants in the case offered $228 million to a high-ranking official in Andhra Pradesh to direct state power companies to buy solar power supplied by Adani Green to SEKI.
However, the news agency said that Jagan’s office denied the allegations of bribery and declined to answer other questions. APERC also did not respond to repeated questions from US prosecutors about the allegations.
The finance ministry also questioned the 25-year contract, which was scheduled to start from 2024, according to cabinet minutes. It said prices would fall between the time the deal was signed and the time the power supply began. The power ministry also supported that advice.
