Indian tycoon Gautam Adani’s indictment by US authorities for alleged bribery over contracts linked to his conglomerate has raised uncertainty over India’s renewable energy ambitions, though the sector’s other players are expected to shield it from any fallout.
Adani was charged on November 20 with allegedly paying US$265 million in bribes to officials to develop power supply contracts in Indian states. Global rating agencies. Moody’s and Fitch on Tuesday lowered their outlook for bonds of Adani group companies to negative from stable.
The rating actions could hurt the ability of the conglomerate – a dominant player in India’s renewable energy sector – to raise fresh funding and increase its cost of capital for projects. But the sector itself should have little trouble in rebounding given its competitive nature, analysts said.
“India’s renewable energy projects are allocated and awarded under a transparent process, which is well-defined and honed over many years. The auctions are very competitive and that process remains unaffected by the allegations,” said Vinay Rustagi, senior director and global head of renewables at ratings agency CRISIL, an S&P Global company.
Green energy is a cornerstone of Indian Prime Minister Narendra Modi’s government, which has outlined an ambitious plan to expand the country’s non-fossil fuel power capacity to 500 Gigawatts by around 2030, paving the way to fulfil its net zero pledge by 2070.
Adani Green Energy Ltd, which calls itself India’s largest renewable energy company, plans to quadruple its operating portfolio by 2030. Its investments include a renewable energy park in Gujarat, a wind and solar energy venture with France’s Total Energies, and other overseas projects.
Comments are closed.