Adani Group's renewable energy ambitions spark controversy over bribery charges
- Bribery charges against Adani Group are currently being alleged by US prosecutors, claiming the company engaged in corrupt practices to secure power contracts.
- India's renewable energy capacity has surged over the last decade, making up approximately 45% of the total power generation capacity.
- Despite the ongoing charges, Adani Group remains committed to achieving its goal of 50 GW of renewable energy by 2030, a target that would constitute 10% of India's installed capacity.
India has seen significant progress in developing its clean energy infrastructure over the past decade, with the installed clean energy capacity increasing five-fold. Approximately 45% of the country's nearly 200 GW power-generation capacity now comes from non-fossil fuel sources. The Adani Group, as the largest renewable energy company in India, plays a vital role in these ambitions, boasting a current output of nearly 11 GW of clean energy and aiming to expand it to 50 GW by 2030. However, the company is currently facing bribery charges filed by US prosecutors, which accuse it of winning contracts through bribery to supply power to state distribution companies. This situation has affected investor confidence, leading major credit ratings agencies to downgrade Adani companies, including Adani Green Energy, to a negative outlook. Consequently, it may become harder for the Adani Group to secure funding, as financial institutions like France's TotalEnergies have announced a halt to new capital injections into the company amid these allegations. Analysts believe this development could benefit competitors, such as Tata Power and ReNew Power, who are also ramping up their renewable energy operations. Despite the controversy, a spokesperson for the Adani Group reiterated their commitment to meeting their 2030 targets. The concerns surrounding the company's financial health arise from its growing reliance on global banks and bond issues, which has increased from 14% in 2016 to nearly 60% today. Some analysts project that while new financing may be limited in the near term, it could gradually improve in the long run. Others argue that even if the Adani Group's expansion is hindered, other firms may fill the void left by a slowdown in Adani's growth in the renewable sector.