Bangladesh asks Adani for full power supply
Staff Reporter :
Bangladesh has asked India’s Adani Power plant to fully restore electricity supply from its 1,600-megawatt plant in India after more than three months of reduced deliveries, a Bangladeshi official said. The supply had been cut in half due to lower winter demand and payment-related disputes.
Adani, which entered into a 25-year agreement under former Prime Minister Sheikh Hasina in 2017, has been supplying power from its $2 billion facility located in Jharkhand, India. This plant, consisting of two units of 800 megawatts each, is dedicated solely to serving Bangladesh.
Adani Power reduced its supply to Bangladesh by 50pc on October 31, due to delayed payments amid the country’s foreign exchange crisis.
As a result, one unit was shut down on November 1, bringing the plant’s operational capacity down to approximately 42pc. Following this, Bangladesh instructed Adani to continue supplying only half the agreed power.
The Bangladesh Power Development Board (BPDB) reported that it has been paying $85 million per month to Adani to settle outstanding dues and has now requested the company to resume power generation from the second unit.
“As per our current requirement, Adani planned to synchronize the second unit today, but due to high vibration issues, it could not be restarted,” BPDB Chairperson Md Rezaul Karim told Reuters, referring to technical difficulties that prevented the unit’s reactivation on Monday.
“We are currently making payments of $85 million monthly and working towards increasing our payments to reduce the outstanding balance. There are no major issues with Adani at present.”
A spokesperson for Adani Power did not provide an immediate response to a request for comment.
In December, an Adani source indicated that BPDB owed the company approximately $900 million, while Karim had earlier said that the actual amount was closer to $650 million.
The disagreement over pricing stems from differences in tariff calculations, as the 2017 agreement bases pricing on an average of two indexes. According to Reuters, Adani’s electricity costs Bangladesh around 55% more than the average price of all Indian power sold to Dhaka.
A Bangladesh court has ordered a review of the contract with Adani by a panel of experts, with findings expected this month. The outcome may lead to potential renegotiations of the agreement.
Last year, Bangladesh’s interim government accused Adani of violating the power-purchase agreement by not passing on tax benefits received from New Delhi for the Jharkhand plant. Documents cited by Reuters in December indicated that Bangladeshi authorities were scrutinizing the contract.
At the time, an Adani spokesperson said that the company had honored all contractual commitments and had not received any indication that Dhaka was reviewing the agreement.
Karim has yet to respond to Reuters’ inquiries on whether the differences between the two parties have been resolved.
Meanwhile, in November, US prosecutors charged Adani Group founder Gautam Adani and seven other executives in connection with an alleged $265 million bribery case in India.
Adani Group has dismissed the US allegations as “baseless.”
In September, the Bangladesh government formed an expert panel to reassess major energy agreements signed by Hasina, who left for New Delhi in August following violent student-led protests.