Bangladesh can keep electricity contract with Adani

India's private company 'Adani Power' and several other state-owned power companies owe Bangladesh more than $1 billion. If some of this money is not paid at least now, there is a fear of further disruption of power supply in the country. However, keeping such concerns aside, Bangladesh can keep the electricity contract with Adani Power. This was reported by the Reuters news agency citing multiple sources.

The former Awami League government has appointed a panel to examine how much the contracts with Adani Power are logical and how much they have thought about the nation's interest. Yunus' interim government. In particular, the transparency of projects launched under the Act has been questioned. The report said that these projects will also be seen at a loss.

Sources told Reuters that supply from Adani Power's thermal power plant in Jharkhand's Godda, which exports power to Bangladesh, has already been reduced by at least 500 MW. The production capacity of Adani power plant is 1 thousand 498 MW. The difference between this power plant and other power plant contracts is that even if PDB wants to, it cannot buy electricity below 34 percent of this 1,498 MW from here. Even if it is not needed, 34% of the electricity has to be bought. And even if it does not buy, Adani will have to pay capacity payment for that amount of electricity.

The agreement further states that the demand shall be paid once every four months. That is, a demand for how much electricity PDB will take from January to April will have to be paid in December. PDB will pay the cost of imported coal even if PDB does not take power for any reason.

Sources said the deal may not be cancelled. According to them, an alternative tariff reduction could be a mutual agreement.

When asked to comment on the matter, Fauzul Kabir Khan, Advisor on Power and Energy to the Interim Government, said, 'The committee is currently reviewing the matter, and it is not the right time to comment yet.'

Adani Power costs about 12 taka ($0.1008) per unit in Bangladesh, a Bangladesh Power Development Board official said, citing the latest audit report for the 2023/24 earth year. That is 27% higher than the rate of other private producers in India and 63% higher than that of Indian state-owned plants.

Under the previous agreement, Bangladesh has been supplying around 1,160 MW of electricity from Adani and other Indian plants since April 2023.

Meanwhile, an Indian spokesperson said that although Bangladesh has reviewed the agreement, there is no indication of Adani in this regard. He said, 'We continue to supply electricity to Bangladesh despite the increase in arrears, which is a matter of concern.'

According to the Reuters report, Bangladesh is struggling to pay the 800 million US dollars due to difficulties in accessing dollars for payment. Of which more than $1 billion is owed to Indian power companies.

In this regard, Adani spokesperson said, 'We have been in continuous dialogue with the Bangladesh Power Development Board and senior government officials, they have said that they will pay our dues soon.'

The spokesperson added that Adani Power was confident that Bangladesh would fulfill its commitments just as Adani had fulfilled the terms of its contract. But when asked why its rate is higher than other suppliers, he did not give any answer.

Source: Reuters reports