Adani warns of supply risk amid BPDB arrears
Staff Reporter :
India’s Adani Power has expressed a willingness to reconsider the contentious coal pricing formula tied to its electricity exports to Bangladesh-provided the Bangladesh Power Development Board (BPDB) clears its outstanding payments.
The assurance was given during a virtual meeting on Monday between senior officials of BPDB and representatives from Adani Power, according to government sources.
“There is an unresolved payment issue with Adani, but some progress has been made,” said Power Division Secretary Farzana Mamtaz.
“Adani has claimed dues amounting to $900 million, though our internal assessment indicates a lower figure. This difference, largely due to late payment penalties, has resulted in a dispute that is still under negotiation.”
She added that efforts are underway to settle the outstanding dues within a month, after which discussions on coal pricing are expected to resume.
BPDB Chairman Md Rezaul Karim confirmed that the meeting addressed a range of issues, including the payment dispute and the pricing mechanism outlined in the power purchase agreement. “We are mobilising funds from various sources and expect to make a substantial payment to Adani this week,” he said.
Bangladesh has formally raised concerns over the current pricing formula, which has been criticised for contributing to elevated power generation costs. Adani has reportedly agreed to review the matter. “Their senior officials have committed to examining our concerns. We will continue working towards a mutually acceptable solution,” Karim added.
Under a long-term deal, Bangladesh imports 1,600 megawatts of electricity from Adani’s coal-fired power plant in Jharkhand. However, the coal pricing mechanism has drawn criticism for relying on volatile international benchmarks and incurring high freight charges-particularly as Adani sources coal from distant suppliers such as Australia, bypassing closer markets.
A recent government review found the formula disproportionately benefits Adani, resulting in significantly higher electricity costs compared to similar facilities, such as the Payra power plant. In FY2023-24, Adani’s electricity was priced at an average of Tk14.87 per unit, compared to Tk11.83 from Payra.