Bangladesh government seeks more power from Adani to increase supply
Last Updated on February 12, 2025 6:25 am
Bangladesh has urged Adani Power to resume full supply from its 1,600-megawatt power plant in India’s Jharkhand state, a Bangladesh Power Development Board (BPDB) official said, citing a three-month supply shortfall.
Reuters reported on Tuesday (February 11).
Adani Power has been supplying power to Bangladesh under a 25-year contract signed with the government of former Prime Minister Sheikh Hasina in 2017. However, the Indian company reduced supply by half since late October, citing low winter demand and bill payment difficulties.
Adani had planned to restart its second unit to meet our current demand, but it was not possible due to high vibrations, said Md. Rezaul Karim, chairman of the BPDB. The unit could not be restarted due to some technical issues, he said.
BPDB said it was paying Adani $85 million per month and was trying to reduce the arrears. There is no other problem with Adani.
Although Adani said in December that it owed BPDB about $900 million, the chairman of the Power Development Board at the time said the amount owed was about $650 million.
The main controversy over the power deal is over the pricing mechanism. The deal sets the price of electricity based on the average of two indices, which leaves Bangladesh paying 55% more than other Indian power suppliers, Reuters reported.
Meanwhile, a Bangladesh court has formed a committee of experts to review the terms of the deal with Adani, which is expected to submit its report this month. The terms of the deal are likely to be revised based on the review.
In 2024, the interim government accused Adani of violating the terms of the deal, which said that Adani received tax benefits from India for its Jharkhand project but did not transfer them to Bangladesh.
Meanwhile, in November, US prosecutors indicted Adani Group founder Gautam Adani and seven executives in a $265 million bribery scandal in India. Adani Group has denied the allegations as baseless.
In September, the interim government formed a special committee to review major energy deals signed during Sheikh Hasina’s tenure, which is also examining the deal with Adani.