NN Online:
The interim government has accused Adani Power – a key electricity supplier – of breaching a multi-billion-dollar agreement. According to documents obtained by Reuters, the company, which received tax benefits from the Indian government for a power plant under the agreement, failed to pass on those benefits to Bangladesh as stipulated. Moreover, Adani is alleged to have concealed information regarding these benefits.
In 2017, the Indian company controlled by billionaire Gautam Adani signed an agreement with Bangladesh to provide power from its coal-fired plant in eastern India.
Dhaka has said it hopes to renegotiate the deal, which was awarded by then-prime minister Sheikh Hasina without a tender process and costs Bangladesh far more than its other coal power deals, according to Bangladesh power agency documents and letters between the two parties reviewed by Reuters, as well as interviews with six Bangladesh officials, reports Reuters.
Dhaka has been behind on payments to Adani Power since supply started in July 2023. It owes several hundred million dollars for energy that has already been supplied, though the two sides dispute the exact size of the bill.
Adviser to the Ministry of Power, Energy and Mineral Resources Muhammad Fouzul Kabir Khan told Reuters the country now had enough domestic capacity to cope without the Adani supply, though not all domestic power generators were operational.
The report said for the first time that the contract came with an additional implementation agreement that addressed the transfer of tax benefits. The news agency is also revealing details about Bangladesh’s plan to reopen the 25-year deal, and that it hopes to use the fallout from US prosecutors’ November indictment of Adani and seven other executives for their alleged role in a $265 million bribery scheme to press for a resolution.
Adani Power has not been accused of wrongdoing in Bangladesh. A company spokesperson said in response to Reuters’ questions that it had upheld all contractual obligations and had no indication Dhaka was reviewing the contract. The company did not answer questions about the tax benefits and other issues raised by Bangladesh.
Adani Group has called the US allegations “baseless.”
The company said the Bangladesh deal helped further Indian foreign policy objectives and Delhi in 2019 declared the plant part of a special economic zone. It enjoys incentives such as exemptions on income tax and other levies.
The power supplier was required to inform Bangladesh swiftly of changes in the plant’s tax status and to pass on the “benefit of a tax exemption” from India’s government, according to the contract and implementation agreement signed on November 5, 2017 between Adani Power and the state-run Bangladesh Power Development Board (BPDB).
But Adani Power did not do so, according to letters sent by BPDB on September 17, 2024 and October 22, 2024 that urged it to remit the benefits.
The agreements and letters are not public but were seen by Reuters.
Two BPDB officials, who spoke to Reuters on condition of anonymity because they were not authorised to talk to the media, said they did not receive responses.
BPDB estimates savings of roughly 0.35 cents per unit of power if the benefit was passed on, the officials said. The Godda plant supplied 8.16 billion units in the year to June 30, 2024, according to an undated Bangladesh government summary of power purchases seen by Reuters, suggesting potential savings of about $28.6 million.
The power adviser said the savings would be a key part of future discussions with Adani Power.
