Andhra Pradesh is likely to suspend power deal with Adani, sources say

Andhra Pradesh is likely to suspend a power purchase deal involving the Adani Group following the US indictment of the group’s billionaire founder Gautam Adani over an alleged bribery scheme, two state government sources said.

The state will ask the federal government and the Solar Energy Corporation of India, which awards power supply contracts to companies like Adani, to investigate the allegations, the sources said.

The suspension, likely to be announced soon, would be the first action by an Indian state government after US prosecutors accused Gautam Adani and seven others of agreeing to pay $265 million in bribes to unidentified Indian government officials to obtain contracts for the supply of solar energy.

Most of the alleged bribes – $228 million – were paid to a government official to get Andhra Pradesh state’s electricity distribution companies to agree to purchase power, the US indictment said. Adani has said the allegations are baseless.

According to one of the sources, power supply to Andhra Pradesh would begin next year as per the agreement.

β€œThe decision will be made very soon,” the second source said of the planned suspension.

Adani Group and the Andhra Pradesh government did not immediately respond to Reuters requests for comment.

Reuters reported earlier on Tuesday that Andhra Pradesh is exploring the possibility of canceling a power supply contract linked to the Adani Group.

Andhra Pradesh’s previous ruling party – YSR Congress Party – under whose administration the alleged misconduct took place, last week denied any wrongdoing.