It took less than two weeks for TotalEnergies SE to put a massive hydrogen energy project with Adani Group on hold after the Indian conglomerate was rocked by allegations of fraud.
The deal — part of a plan in which billionaire Gautam Adani’s energy business would have invested US$50 billion over the next decade in the fuel — remains in limbo, a victim of Hindenburg Research’s short-seller report.
The fallout is unlikely to be limited to the Adani empire. The controversy over the business practices of the group — which became one of the country’s biggest investors in renewable energy sources after expanding from transport infrastructure — means there will likely be greater scrutiny of Indian corporate governance across the board.
Photo: Reuters
Energy transition investments in India already lag behind other major nations and now the cost of capital is increasing as global interest rates rise, while the US Inflation Reduction Act is creating more opportunities for clean-power investors in the US and its free-trade partners.
That spells trouble for Indian Prime Minister Narendra Modi’s goal to put India at the forefront of climate action.
“The markets are enforcing discipline on companies, including Adani, to reduce debt and bring in equity,” said Shashank Krishna, a London-based partner at law firm Baker Botts LLP, who advises clients on energy and infrastructure deals. “Some projects that are borderline economically viable or may not have a strong business case will have to be shelved or reduced in size.”
The headwinds are making the Indian government’s goal of tripling clean-electricity capacity by the end of the decade less achievable.
New Delhi wants to increase the current 169 gigawatts to 500 gigawatts by 2030, taking its percentage of the total from 41 percent to almost two-thirds.
If it falls short of the target, the world’s third-largest emitter would rely on coal for longer. That is bad news for the Indian economy, which hopes to lure investment from multinationals under pressure to decarbonize their supply chains.
While India installed 15 gigawatts of grid-connected wind and solar capacity last year, 44 percent more than in 2021, it is still well short of what is needed to reach the 2030 target.
Moreover, making a major increase in the level of investment was already proving tough before the Adani crisis.
Investment in the deployment of renewable energy technology rose about 4 percent to US$11.5 billion in India last year, but that was still lower than a recent peak of US$12.7 billion in 2017, data compiled by BloombergNEF showed.
Fiscal incentives such as US legislation are drawing a lot of capital that could have potentially found its way to India, said Anita George, a cofounder of Edhina Capital, an Indian private-equity firm looking to invest in clean energy, mobility, green buildings and recycling opportunities. “That has been a dampener for all the emerging markets, not just India.”
‘NATURAL CAUSES’: New evidence indicated Kathleen Folbigg’s two daughters died of myocarditis caused by genetics, while a son died of a neurogenetic disorder An Australian woman who spent 20 years in prison was pardoned and released yesterday based on new scientific evidence that her four children died by natural causes as she had insisted. The pardon was seen as the quickest way of getting Kathleen Folbigg out of prison and a final report from the second inquiry into her guilt could recommend that the state Court of Appeals quash her convictions. Folbigg, now 55, was released from a prison in Grafton, New South Wales, following an unconditional pardon by state Governor Margaret Beazley. Australian state governors are figureheads who act on instructions of governments. New South
A long trek across the desert of northeastern Niger brings visitors to one of the most astonishing and rewarding sights in the Sahel: fortified villages of salt and clay perched on rocks with the Saharan sands laying siege below. Generations of travelers have stood before the “ksars” of Djado, wondering at their crenelated walls, watchtowers, secretive passages and wells, all of them testifying to a skilled, but unknown hand. Who chose to build this outpost in a scorched and desolate region — and why they built it — are questions that have never been fully answered. Just as beguiling is why it
RE-ENGAGEMENT: Both sides described the talks as ‘candid’ and ‘productive,’ with the US State Department saying that it wants to restore ‘high-level diplomacy’ Senior US and Chinese officials yesterday held “candid” talks in Beijing, days after the two countries’ defense chiefs squared off at a security forum. US Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink met with Chinese Vice Minister of Foreign Affairs Ma Zhaoxu (馬朝旭), becoming the most senior US official to publicly travel to Beijing since an alleged Chinese spy balloon was downed in the US. Both sides described the talks as “candid” and “productive” in their readouts, with the US Department of State saying that the exchange was part of ongoing efforts to restore “high-level diplomacy.” The Chinese
OPERATION BLACKSTONE: Belgian diplomats implied that it is worth releasing Iranians detained on terrorism charges to allow for innocent people to return home Three Europeans released from detention by Iran arrived in Belgium early yesterday, the latest in a series of prisoner swaps. One Dane and two Austrian-Iranian citizens landed shortly before 2:45am at Melsbroek Air Base just outside Brussels. They had flown from Muscat, the capital of Oman, which helped broker their release. Belgian Minister of Foreign Affairs Hadja Lahbib welcomed them at the airport, along with Danish and Austrian diplomats. The trio’s release, as well as that of a Belgian aid worker a week earlier, were part of a prisoner swap in which Tehran got back an Iranian diplomat convicted and incarcerated in Belgium
RSS