Adani Power Limited (APL) has no commitment to achieve net zero emissions and no meaningful plans to manage the energy transition and is therefore not Paris-aligned.
APL has no plans for the retirement of its existing coal fleet and has plans to build an additional 8.8 GW of new coal generation capacity.
In the six years to FY22 the company generated losses of $870 m. Even considering the expected net profit for FY23e, for the seven years from FY17 through to FY23e the company is expected to generate a total loss of $150 m. As a coal generation company 100% of earnings are derived from fossil fuels. This serves to highlight the risk and volatility of earning streams reliant on fossil fuel generation.
APL received a qualified audit opinion in the FY20 and FY21 accounts in relation to APL’s carrying value for Mundra Limited given it has significant operational losses from earlier years related to coal shortages and limited cost pass-through of high spot prices. The net worth of the subsidiary has been completely eroded. The auditors were unable to corroborate the $730 m carrying value of the investment.