Indian state set to suspend Adani power deal, sources say

New Delhi — India’s Andhra Pradesh state is likely to suspend a power purchase deal linked to Adani Group as a result of to 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, which awards power supply contracts to companies like Adani, to investigate the charges, the sources said.

The suspension, likely to be announced soon, would be the first such action by an Indian state government after US prosecutors charged Adani and seven other people with agreeing to pay bribes of $265m to unidentified Indian government officials to obtain solar power-supply contracts.

Most of the alleged $228m in bribes was paid to a government official to get Andhra Pradesh’s state electricity distribution companies to agree to buy power, according to the US indictment. Adani says the allegations are baseless.

The power supply to Andhra Pradesh under the agreement was scheduled to start from next year, according to one of the sources.

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

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

Earlier on Tuesday Andhra Pradesh was reportedly exploring the possibility of cancelling a power supply contract linked to Adani Group.

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

Reuters