Chief Minister N Chandrababu Naidu-led Andhra Pradesh government is mulling over its options regarding a 7,000 MW solar power project with the Adani Group.
This project has come under scrutiny following allegations of bribery linked to both Adani Green Energy Limited (AGEL) and Opposition leader and former Chief Minister YS Jagan Mohan Reddy.
The allegations of bribery is of ₹1,750 crore.
Also read: Jagan's role in Adani bribery case: Allegations & timelines
Sources say that Naidu is personally reviewing the matter. A detailed note has been prepared for him, outlining the financial implications of various courses of action available to the state.
As per reports, the state government's inclination is towards urging the Solar Energy Corporation of India Limited (SECI) to terminate the power purchase agreement (PPA) with AGEL, citing concerns over integrity.
The government could invoke the integrity clause in the agreement and seek a thorough investigation into the bribery allegations.
Another option involves renegotiating the tariff with AGEL. While the company initially proposed a tariff of ₹2.49 per kWh, further analysis suggests additional costs, including customs duties, GST, and transmission losses, could raise the effective tariff to ₹3.869 per kWh. Over 25 years, this would amount to a total power bill of ₹1.61 trillion.
The final step is to terminate the power supply agreement with SECI entirely.
However, this would entail a penalty of ₹2,100 crore as stipulated in the agreement. Such a decision can be far-fetched given the state’s financial constraints and its ongoing efforts to attract investments.
It is expected that the state would adopt a cautious approach.
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