The Indian state of Andhra Pradesh is likely to suspend the power deal with Adani

On By Pranco

Indias The state of 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 southern state will ask the federal government and the Solar Energy Corporation of India (SECI), 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

Andhra Pradesh is ruled by Prime Minister Narendra Modi’s key ally, Chandrababu Naidu, whose party has the second-highest number of parliamentary seats in the coalition government formed after the main Bharatiya Janata Party failed to win a majority in the national elections that concluded in June.

Modi’s federal government has so far not commented on the US charges against Adani.

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According to one of the sources, power supply to Andhra Pradesh under the SECI agreement would start next year.

“The decision will be made very soon,” the second source said of the planned suspension.

Clauses in the power supply agreements stipulate that Indian states can terminate contracts and also exclude the companies involved from any future bidding if the bidder has committed a serious violation.

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. REUTERS