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The Solar Energy Corporation of India (SECI) has refused to comment on CNBC TV18's query regarding whether it will cancel its Power Purchase Agreement (PPA) with Adani Power after a US district court and the SEC (Securities and Exchange Commission) indicted Gautam Adani and other group executives on bribery charges related to certain solar energy contracts.
Speaking to CNBC TV18 about the indictment of Adani Group officials, SECI's Chairman and Managing Director, RP Gupta, said that there is no basis to probe anything at this point. He further stated that SECI has not formally received any documents from the US or any authentic sources thus far.
While it is unclear if any SECI rules have been violated, Gupta emphasised that the usual Power Supply Agreements (PSAs) and Power Purchase Agreements (PPAs) were signed in this case as well. He noted that there are no charges or allegations against SECI and declined to comment on the veracity or correctness of the charges levied by the American court order against the states.
SECI is a Central Public Sector Undertaking (PSU) tasked with the development and expansion of Renewable Energy (RE) capacity in India as a Renewable Energy Implementing Agency (REIA). It facilitates market development by creating an ecosystem for RE through activities such as policy advocacy, prototyping, and innovative project configurations, including Solar-Wind hybrid systems with/without energy storage, Round The Clock (RTC) power supply, and Firm and Dispatchable RE (FDRE), among others.
Since its inception in 2011 as a not-for-profit company under Section 25 of the Companies Act, 1956, SECI has established a pan-India presence in nearly all states and Union Territories. It was incorporated as a not-for-profit company and later converted to a commercial company in 2015 under Section 3 of the Companies Act, 2013.
Also read: Significant setback for Gautam Adani after US court, SEC charge him, other group executives of bribery
SECI serves as an implementing agency for Solar, Wind, and Hybrid Projects and releases tenders to select Renewable Energy (RE) developers for projects on a pan-India or state-specific basis. The selection process for successful bidders is conducted through a tariff-based competitive e-bidding procedure.
Once selected, SECI enters into a 25-year Power Purchase Agreement (PPA) with the chosen bidders for the procurement of power from these projects. SECI also establishes back-to-back 25-year Power Sale Agreements (PSA) with distribution companies (discoms) or other buying entities for the sale of the procured power.
According to the American court's order, a US issuer and the Indian Energy company’s subsidiary were issued Letters of Award (LoAs) for manufacturing-linked solar tender offers by SECI. The US issuer agreed to supply 4 GW of solar power to SECI, while the Indian Energy company’s subsidiary agreed to supply 8 GW.
Also read: Adani group stocks shed over ₹2.3 lakh crore market value — that may not be the end of it
SECI’s role was to identify the state electricity distribution companies that would purchase the 12 GW of power. Terms of the LoAs and amended LoAs obligated SECI to purchase solar power from both entities at a fixed rate.
At the time of the award, the size and scope of the project was among the largest global solar energy projects. The US issuer had anticipated that over 20 years, the project would generate over $2 billion in Profit After Tax (PAT).
The following state-run entities were named in the American court's order:
The following is a timeline of the MoUs signed between these entities from October 2021 to February 2022:
Speaking to CNBC TV18 about the indictment of Adani Group officials, SECI's Chairman and Managing Director, RP Gupta, said that there is no basis to probe anything at this point. He further stated that SECI has not formally received any documents from the US or any authentic sources thus far.
While it is unclear if any SECI rules have been violated, Gupta emphasised that the usual Power Supply Agreements (PSAs) and Power Purchase Agreements (PPAs) were signed in this case as well. He noted that there are no charges or allegations against SECI and declined to comment on the veracity or correctness of the charges levied by the American court order against the states.
SECI is a Central Public Sector Undertaking (PSU) tasked with the development and expansion of Renewable Energy (RE) capacity in India as a Renewable Energy Implementing Agency (REIA). It facilitates market development by creating an ecosystem for RE through activities such as policy advocacy, prototyping, and innovative project configurations, including Solar-Wind hybrid systems with/without energy storage, Round The Clock (RTC) power supply, and Firm and Dispatchable RE (FDRE), among others.
Since its inception in 2011 as a not-for-profit company under Section 25 of the Companies Act, 1956, SECI has established a pan-India presence in nearly all states and Union Territories. It was incorporated as a not-for-profit company and later converted to a commercial company in 2015 under Section 3 of the Companies Act, 2013.
Also read: Significant setback for Gautam Adani after US court, SEC charge him, other group executives of bribery
SECI serves as an implementing agency for Solar, Wind, and Hybrid Projects and releases tenders to select Renewable Energy (RE) developers for projects on a pan-India or state-specific basis. The selection process for successful bidders is conducted through a tariff-based competitive e-bidding procedure.
Once selected, SECI enters into a 25-year Power Purchase Agreement (PPA) with the chosen bidders for the procurement of power from these projects. SECI also establishes back-to-back 25-year Power Sale Agreements (PSA) with distribution companies (discoms) or other buying entities for the sale of the procured power.
According to the American court's order, a US issuer and the Indian Energy company’s subsidiary were issued Letters of Award (LoAs) for manufacturing-linked solar tender offers by SECI. The US issuer agreed to supply 4 GW of solar power to SECI, while the Indian Energy company’s subsidiary agreed to supply 8 GW.
Also read: Adani group stocks shed over ₹2.3 lakh crore market value — that may not be the end of it
SECI’s role was to identify the state electricity distribution companies that would purchase the 12 GW of power. Terms of the LoAs and amended LoAs obligated SECI to purchase solar power from both entities at a fixed rate.
At the time of the award, the size and scope of the project was among the largest global solar energy projects. The US issuer had anticipated that over 20 years, the project would generate over $2 billion in Profit After Tax (PAT).
The following state-run entities were named in the American court's order:
- Chhattisgarh State Power Distribution Company
- Tamil Nadu Generation and Distribution Corporation
- GRIDCO
- Jammu & Kashmir Power Corporation
- Andhra Pradesh Central Power Distribution Corporation
- Andhra Pradesh Eastern Power Distribution Company
- Andhra Pradesh Southern Power Distribution Company
The following is a timeline of the MoUs signed between these entities from October 2021 to February 2022:
- The US issuer and Indian Energy company subsidiaries signed PPAs with SECI between October 2021 and February 2022.
- The US issuer agreed to supply SECI with 650 MW of solar power for Chhattisgarh, Tamil Nadu, Odisha, and Jammu & Kashmir.
- 2.3 GW of solar power was to be supplied to Andhra Pradesh by the US issuer.
- The Indian energy company executed its own PPAs with SECI to supply solar power to Chhattisgarh, Tamil Nadu, Odisha, Jammu & Kashmir, and Andhra Pradesh.
(Edited by : Sheersh Kapoor)
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