How does Gautam Adani’s crisis point to a bigger risk in India’s net zero plan?

India’s tycoons are committed to spending far more than the government on the energy transition, led by Adani’s commitment to investing $70 billion in green energy infrastructure. Reliance of Industries Limited Mukesh Ambani and JSW Group Sajjan Jindalwith energy giants like Bye Groups have also rushed to champion change for a cleaner future.

But about the companies involved with the Hindenburg Research allegations Adani Group Cast doubt on the firm Future, including its massive green energy investments. It has also created problems for Adani Green, the renewable energy arm of the group. The storm that has now engulfed Asia’s second richest man threatens to spread to other groups as well; Hindenburg Research has raised questions on the corporate governance of the country.

Because the Adani group is a major player in India’s clean energy industries, the pace of investment could be slow, said Ashwini Swain, a fellow at the New Delhi-based Center for Policy Research. “We cannot depend on two or three companies to reach our goals. We need a populated area,” he said. “There are other players as well and many more will join to take the journey forward.”

India’s National Climate Blueprint sets 2070 as a target for net zero emissions, 10 years behind China and two decades behind Europe. India will continue to expand its coal power fleet to address energy shortfalls, prompting the government last month to defend fossil fuel use while in the same breath vowing to remain committed to decarbonisation.

According to the International Energy Agency, to meet its target, India needs investments of $160 billion annually by 2030, nearly triple the level today. foreign direct InvestmentWhile growing, a fraction of the current commitments remain. Adani’s rapid decline could further undermine investor confidence in India more widely, threatening to curtail capital flows to green financing in the country.

The gap highlights the government’s reliance on its private sector to meet its green goals. While fighting climate change around the world will require private capital, the sheer size of India’s challenges makes it more dependent on its richest citizens and biggest corporations.

Executives have been happy to oblige so far, as the prize is a top spot in the lucrative industries of tomorrow. Adani and Reliance’s Ambanis are vying to become the biggest investors in India’s green sector, with the billionaires steadily one-upping each other with new announcements of huge manufacturing plants and some of the world’s biggest projects.

Gautam Adani has often aligned his businesses with the development goals of Prime Minister Narendra Modi and has been characterizing Hindenburg Allegations of fraud as an attack against his country on research. At the same time, Energy Minister Raj Kumar Singh told reporters in New Delhi on Thursday that there are more than a dozen big companies that can take forward India’s agenda.

Adani, who made billions on the back of his coal empire, has established himself as one of the leading advocates of new and experimental green technology. He is planning huge solar and wind manufacturing hubs across the country, and is developing a supply chain for the world’s cheapest green hydrogen, with the aim of positioning India as an exporter of the clean fuel.

But some environmental advocates say Adani and his company weren’t so green in the beginning. Adani doubled coal production last year as Modi promised to give more Indians reliable electricity amid global fuel supply shortfalls. The group’s mining operations account for at least 3% of global CO2 emissions from coal, according to SumOfUs, an activist group that campaigns with the aim of applying pressure on powerful corporations.

“India is much more than Adani. “Their role in India’s energy transition is disputed,” said Asad Razzouk, chief executive officer of Singapore-based renewables firm Gurin Energy.

India plans to reduce the share of fossil fuels in the country’s electricity mix to 50% by 2030, from 57% today. India still relies heavily on coal for power generation, with demand for the dirtiest fossil fuel expected to peak by 2025, and critics say the government needs to do more to limit global warming.

The most immediate consequence of Adani’s current defeat is that it will be more difficult for the billionaire to raise money to fuel his green expansion. But there’s also an open question about debt. Adani Green Energy Limited, the entity developing renewable projects. The debt-to-capital ratio for the firm soared to 95.3% in the last fiscal year ended March, according to Bloomberg calculations. It has since dropped to 88.5%, but remains higher than its peers.

Adani Green has the highest funding risk of the group companies due to its weak balance sheet, according to analysts at Bloomberg Intelligence, adding that the firm has $1.25 billion in bonds due next year. “Adani Green Energy’s cash may not cover short-term debt maturities till September,” said analysts.

“Will it hurt Adani? Clearly. This should have already happened,” said Tim Buckley, director of the Sydney-based Climate Energy Finance think tank and a longtime observer of the billionaire. “You will find that a lot of Western capital will now escape the Adani group. This is going to put at risk Adani’s ability to access global western capital and especially green capital and ESG capital.