Bangladesh can maintain the electricity contract with Adani
Setting aside pricing concerns, supply concerns and legal challenges could keep Bangladesh in the power purchase agreement with India’s Adani Power. Reuters reported the information on Friday (October 11) citing two sources familiar with the matter.
According to the report, the new government has set up a panel to scrutinize whether its predecessor’s contracts, particularly opaque, flawed schemes under special laws, adequately safeguarded the nation’s interests. A 25-year power purchase agreement signed in 2017 from Adani’s 1,600 MW power plant in India’s eastern state of Jharkhand is under review amid price concerns.
However, a source on condition of anonymity said the project meets about one-tenth of Bangladesh’s electricity needs. So it will be difficult to cancel Adani’s deal outright. Furthermore, legal challenges in international courts are likely to fail without strong evidence of fraud in the contract.
A second source said walking away from the deal may not be possible, with the only possible option being a mutual agreement to lower the price.
When asked about this, Muhammad Fawzul Kabir Khan, Advisor on Power and Energy of the Interim Government, said, “The committee is currently reviewing the matter, so it would not be time to comment on it.”
An official of the Bangladesh Power Development Board, quoting the latest audit report for the fiscal year 2023-24, said Adani Power charges around Tk 12 per unit of electricity in Bangladesh. This is 27 percent higher than the rate of other private producers in India and 63 percent higher than that of Indian state-owned plants.
An Indian spokesman said Adani had “no indication” that Bangladesh was reviewing the deal.
“We are continuing to supply power to Bangladesh despite mounting arrears, which is a matter of significant concern and destabilizing power plant operations,” the spokesperson said.
Adani will get about $800 million from Bangladesh for power dues. Bangladesh is trying to pay this amount.
An Adani Power spokesperson said, “We are in constant dialogue with the Bangladesh Power Development Board and senior government officials, who have assured us that our dues will be cleared soon.”
However, the spokesperson did not answer the question as to why the price of electricity supplied by Adani was higher than that of other suppliers.
