J&K Power Corpn Ltd signed PSA for solar power
Mohinder Verma
JAMMU, Nov 22: Like several States of the country, Union Territory of Jammu and Kashmir is also in the focus following the US indictment of Gautam Adani and seven others for allegedly paying bribes to the Government officials for securing solar power contracts.
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As per the indictment document issued by United States District Court Eastern District of New York, the copy of which is available with EXCELSIOR, between December 2019 and July 2020, US Issuer and the Adani Group’s Indian Energy Company and its subsidiary won and were issued Letters of Awards (LOAs) for a manufacturing linked solar tender offered by the Solar Energy Corporation of India (SECI), a company of the Ministry of New and Renewable Energy, whose mission, among other things, was to increase the use of renewable energy in India.
As part of the award, the US Issuer agreed to supply four Gigawatts of solar power to SECI and the Indian Energy Company’s subsidiary agreed to supply eight Gigawatts of solar power to SECI, which in turn was responsible for finding State Electricity Distribution Companies that would purchase 12 Gigawatts of power that the Indian Energy Company’s subsidiary and the US Issuer had agreed to supply.
The terms of LOAs and amended LOAs obligated SECI to purchase solar power from US Issuer and the Indian Energy Company’s subsidiaries at a fixed rate. At the time of its award, the size and scope of the Manufacturing Linked Project was among the largest global solar energy projects. The Manufacturing Linked Project more than doubled the capacity of renewable-power under the Indian Energy Company’s and the US Issuer’s portfolios.
However, the high energy prices contemplated in the LOAs made it difficult for SECI to find Indian state buyers of energy under the Manufacturing Linked Project. After the award of Manufacturing Linked Project, SECI unsuccessfully sought out Indian state and Union Governments to purchase 12 Gigawatts of solar power pursuant to the Power Sale Agreements (PSAs). Without PSAs to sell the energy to State buyer, SECI would not enter into corresponding Power Purchase Agreements (PPAs) to purchase power from the Indian Energy Company’s subsidiaries or the US Issuer.
As a result, Gautam Adani and others devised a scheme to offer, authorize, make and promise to make bribe to Government officials in exchange for them causing State Electricity Distribution Companies to enter into PSAs with SECI.
“Following the promise of bribes to Government officials, in or about and between July 2021 and February 2022, electricity distribution companies for the States of Odisha, Tamil Nadu, Chhattisgarh and Andhra Pradesh and Union Territory of Jammu and Kashmir entered into PSAs with SECI under the Manufacturing Linked Project”, the document has pointed out.
The document further said, “in or about and between October 2021 and February 2022, the US Issuer and the Indian Energy Company, through subsidiaries, executed PPAs with SECI. Pursuant to the PPAs, the US Issuer agreed to supply SECI with approximately 650 Megawatts of solar power for the Union Territory of J&K, Chhattisgarh, Tamil Nadu and Odisha”, adding “subsidiaries for the Indian Energy Company, likewise, executed their own PPAs with SECI under which the subsidiaries agreed to supply SECI with solar power for these States and J&K UT (J&K Power Corporation Limited)”.
All this clearly indicates that J&K UT is also on the focus following the US indictment of Gautam Adani and seven others in USD 265 million bribery scandal.
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