India’s largest renewable energy company faces US bribery charges

Dec 12

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Jack Aylmer Energy Correspondent

By Jack Aylmer (Energy Correspondent), Zachary Hill (Video Editor), Ali Caldwell (Graphics)

India’s largest green energy company, the Adani Group, is facing bribery charges in the United States. These accusations have led to questions about whether the situation will impact Delhi’s clean power plans.

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American prosecutors claim the Adani Group’s CEO, Gautam Adani, offered $250 million to Indian government officials in exchange for billions of dollars in renewable energy development contracts. Officials said this scheme occurred from 2020 to this year.

The U.S. attorney for the Eastern District of New York alleged in a release accompanying the indictment against the company that the conspirators “lied about the bribery scheme as they sought to raise capital from U.S. and international investors.”

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This legal trouble for the Adani Group comes as the company has pledged to invest $100 billion to support India’s renewable energy transition. The company aimed to supply 10% of the country’s renewable electricity needs by 2032.

Fallout from the indictment has already begun. French power conglomerate TotalEnergies suspended additional investments in the Adani Group. The U.S. also canceled a $600 million bond offering to the company immediately after the news became public.

Major credit agencies have downgraded the Adani Group’s ratings to negative. Global lenders are reportedly reevaluating their relationships with the company.

These developments could ultimately have some major financial implications for the Adani Group. The company dependence on international banks and bonds for long-term debt has grown significantly. Experts said it grew from 14% in 2016 to 60% today.

However, industry analysts and competitors believe the charges are unlikely to derail India’s renewable energy goals. One rival CEO described the situation to the BBC as a “passing dark cloud” unlikely to hinder the country’s clean power momentum.

Analysts agree that while the company’s expansion plans may face temporary delays, the situation shouldn’t prevent India’s renewable energy targets from remaining on track.

Tags: BBC, Debt, India, Renewable energy, United States

[Jack]

INDIA’S LARGEST GREEN ENERGY COMPANY IS FACING BRIBERY CHARGES IN THE U.S.

THE ADANI GROUP VOWED TO INVEST 100 BILLION DOLLARS IN INDIA’S CLEAN POWER TRANSITION-

HELPING THE COUNTRY SOURCE HALF OF ITS ELECTRICITY NEEDS FROM RENEWABLES BY 20-32-

A TENTH OF WHICH IS EXPECTED TO BE SUPPLIED BY THE ADANI GROUP.

BUT AMERICAN PROSECUTORS ALLEGE THE COMPANY USED ILLEGAL MEANS TO SECURE ITS INVOLVEMENT IN THOSE PROJECTS.

SAYING A PAYMENT OF 250 MILLION DOLLARS WAS OFFERED TO INDIAN GOVERNMENT OFFICIALS BY THE ADANI GROUP’S CEO IN EXCHANGE FOR BILLIONS IN RENEWABLE ENERGY DEVELOPMENT CONTRACTS.

THIS SCHEME IS BELIEVED TO HAVE OCCURRED FROM 2020 TO THIS YEAR.

THE U.S. ATTORNEY FROM THE EASTERN DISTRICT OF NEW YORK CLAIMS THE CONSPIRATORS LIED ABOUT THEIR BRIBERY PLOT AS THEY SOUGHT TO RAISE CAPITAL FROM U.S. AND INTERNATIONAL INVESTORS.

THESE ALLEGATIONS HAVE ALREADY LED TO SOME SIGNIFICANT FALLOUT.

FRENCH POWER CONGLOMERATE TOTAL ENERGIES HALTED FURTHER CAPITAL INFUSION INTO THE ADANI GROUP-

AND A 600 MILLION DOLLAR BOND OFFERING TO THE COMPANY IN THE U.S. WAS ALSO IMMEDIATELY CANCELLED AS SOON AS THE INDICTMENT AGAINST THEM WENT PUBLIC.

MEANWHILE, MAJOR CREDIT AGENCIES HAVE CHANGED THEIR RATING OF THE ADANI GROUP TO NEGATIVE-

WHILE GLOBAL LENDERS ARE SAID TO BE REVIEWING THEIR TIES TO THE COMPANY.

THIS COULD HAVE MAJOR FINANCIAL IMPLICATIONS FOR THE ADANI GROUP-

WHICH HAS SEEN ITS RELIANCE ON INTERNATIONAL BANKS AND BONDS FOR ASSISTANCE WITH LONG-TERM DEBT GROW FROM 14 PERCENT IN 2016 TO 60 PERCENT TODAY.

HOWEVER, THE COMPANY’S COMPETITORS IN THE RENEWABLE ENERGY SECTOR REPORTEDLY BELIEVE THE CHARGES WON’T HAVE MUCH OF AN IMPACT ON INDIA’S CLEAN POWER GOALS.

ACCORDING TO THE BBC, ONE RIVAL CEO COMPARED THE SITUATION TO A PASSING DARK CLOUD THAT WILL NOT MEANINGFULLY HINDER MOMENTUM IN THIS AREA.

INDUSTRY ANALYSIS AGREE-

PREDICTING THIS LEGAL TROUBLE COULD TEMPORARILY DELAY THE ADANI GROUP’S EXPANSION PLANS BUT WILL NOT AFFECT THE INDIAN GOVERNMENT’S OVERALL RENEWABLE ENERGY TARGETS.

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