Bangladesh cuts power imports from Adani Power by half amid payment disputes, bribery charges, forex crisis | Company Business News

Bangladesh has slashed its electricity imports from India’s Adani Power by half, citing reduced winter demand and unresolved payment issues amounting to hundreds of millions of dollars, according to government officials, as reported by Reuters.

Adani Power reduced its supply on October 31, citing delayed payments from Bangladesh, grappling with a foreign exchange crisis. Officials confirmed that Dhaka subsequently requested Adani to maintain only half the usual supply while continuing to settle its outstanding dues, the report added.

“We were shocked and angry when they cut our supply,” Md. Rezaul Karim, chairperson of the state-run Bangladesh Power Development Board (BPDB), told Reuters.

“Winter demand is now down, so we have told them there is no need to run both units of the plant,” he said. 

Adani supplies power under a 25-year deal signed in 2017, during former Prime Minister Sheikh Hasina’s tenure. The agreement involves a $2 billion power plant in Jharkhand, India, with a total capacity of about 1,600 megawatts.

Reduced Operations at Adani’s Plant

A Reuters-reviewed document showed the plant operated at only 41.82% capacity in November, its lowest this year. One of the two units has been offline since November 1.

Last winter, Bangladesh imported about 1,000 MW per month from Adani. However, two BPDB officials noted no timeline had been set for resuming full imports.

Adani Power acknowledged the mounting dues were impacting plant operations. “We are in constant dialogue with senior officials of BPDB and the government, who have assured us that our dues will be cleared soon,” a company spokesperson stated.

The spokesperson added that Adani remains confident Bangladesh will meet its commitments, just as the company has adhered to its contractual obligations.

Spiraling Debt and Payment Delays

Bangladesh owes Adani approximately $650 million, according to BPDB. While Dhaka paid $85 million in November and $97 million in October, Adani sources claim the total dues have now climbed to around $900 million. This has strained the company’s financials, potentially raising borrowing costs.

A BPDB official indicated that Bangladesh is pushing for a significant reduction in Adani’s rates, though no official review of the agreement has been confirmed.

High Costs Under Scrutiny

Adani’s power prices are the highest among Indian suppliers to Bangladesh. According to a government document, Adani charged 14.87 taka per unit in the fiscal year ending June 2024, compared to an average of 9.57 taka charged by other Indian suppliers.

Retail electricity in Bangladesh is priced at 8.95 taka per unit, forcing the government to provide subsidies totalling 320 billion taka ($2.7 billion) annually.

“Because the prices are high, the government has to subsidise,” said Muhammad Fouzul Kabir Khan, a power and energy adviser in Bangladesh. “We would like power prices, not only from Adani, to come down below the average retail prices.”

(With inputs from Reuters)