Adani has no guaranteed customer for $6 bn Indian solar project: Report

 

Shares in Adani Green Energy have soared three-fold since the signing of the 8 gigawatt (GW) multi-plant deal.

Adani Green Energy's record $6 billion solar power project announced in June has no guaranteed customer, its deal with India's main solar-adoption agency shows, and may expose the company to higher financial risk.

Shares in the firm, controlled by billionaire Gautam Adani, have soared three-fold since the signing of the 8 gigawatt (GW) multi-plant deal, which Adani hailed as the "largest of its type, ever" and a landmark for India.

However, previously unreported details of the agreement between Adani Green and Solar Energy Corp of India Ltd (SECI) reveal the agency has no "legal or financial obligation" to support the project if SECI fails to find buyers.

This would be the first major SECI project without a state-guaranteed Power Purchase Agreement (PPA), which analysts say has been key to building up India's renewable energy sector.

When SECI floated the tender for the project in June 2019, it had said a PPA would be assured, but it withdrew the clause guaranteeing purchase in the deal signed a year later.

"There shall not be any legal or financial implication to SECI in relation to such (unsold) quantum including associated quantum of manufacturing facilities," the agreement, reviewed by Reuters, says.