Bangladesh seeks full power supply restoration from Adani plant
A Bangladeshi official stated that Bangladesh has requested Adani Power to fully resume supplies from its 1,600-megawatt plant in India, following over three months of reduced sales, with supplies cut by half due to low winter demand and payment disputes.
Adani, which signed a 25-year contract with Bangladesh under former Prime Minister Sheikh Hasina in 2017, has been supplying power from its $2 billion plant in India's Jharkhand state. The plant, with two 800-megawatt units, sells exclusively to Bangladesh. However, on October 31, Adani halved its supply to Bangladesh due to payment delays caused by a foreign exchange shortage in the country. This resulted in the shutdown of one unit on November 1, leaving the plant operating at only 42% capacity.
Following this, Bangladesh instructed Adani to continue supplying only half of the power. The state-run Bangladesh Power Development Board (BPDB) reported it had been paying $85 million per month to settle outstanding dues and has now urged the company to restore supply from the second unit.
BPDB Chairperson Md. Rezaul Karim told Reuters that while plans were made to synchronize the second unit, technical issues such as high vibrations prevented it from restarting on Monday. "Currently, we are paying $85 million a month. We're trying to pay more and aim to reduce the overdue amount. There's no major issue with Adani now," he added. BPDB and Adani officials were scheduled to meet virtually on Tuesday after a recent meeting to address various issues.
An Adani Power spokesperson did not respond immediately to requests for comment. In December, an Adani source mentioned that BPDB owed the company approximately $900 million, while Karim had stated the amount was around $650 million.
The pricing dispute stems from differences in how power tariffs are calculated. Under the 2017 agreement, pricing is based on an average of two indexes, causing Adani’s power to cost Bangladesh about 55% more than the average price of all Indian power sold to Dhaka, according to Reuters.
A Bangladesh court has ordered an examination of the contract with Adani by a committee of experts, with results expected this month, which could potentially lead to contract renegotiations.
In 2023, Bangladesh’s interim government accused Adani of breaching the power-purchase agreement by withholding tax benefits that the Jharkhand plant received from New Delhi, according to Reuters. Bangladesh officials have also been reviewing the contract.
An Adani spokesperson responded at the time, stating that the company had fulfilled all contractual obligations with Bangladesh and had no indication that Dhaka was reviewing the contract.
Karim has not responded to Reuters’ questions regarding whether the two parties have resolved their differences.
In November, U.S. prosecutors indicted Adani Group founder Gautam Adani and seven other executives for allegedly participating in a $265 million bribery scheme in India. Adani Group has denied the allegations, calling them "baseless."
In September, the Bangladesh government formed a panel of experts to examine major energy deals signed under Hasina’s leadership, as she fled to New Delhi in August after deadly student-led protests.
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