Bangladesh’s interim government is reportedly hoping to renegotiate a 2017 multibillion-dollar deal with Adani to provide power from its coal-fired plant in eastern India. The deal was awarded by then Prime Minister Sheikh Hasina without a tender process, costing Bangladesh far more than its other coal power plants. The interim government has accused Adani Power of violating the agreement by withholding tax benefits for a power plant at the center of the deal it secured from New Delhi.
According to a Reuters report, Dhaka owes several million dollars for energy that has already been supplied. However, the two sides are disputing the exact size of the bill. Bangladesh Power Minister Mohammad Fauzul Kabir Khan said the country now has enough domestic capacity to compete without Adani supplies.
According to the report, Bangladesh plans to reopen the 25-year deal and hopes to leverage the fallout from US allegations in the $265 million bribery scheme to press for a solution. The Adani group denied the allegations and called them baseless.
An Adani Power spokesperson said they had upheld all contractual obligations and had no indication of Bangladesh reviewing the contract.
Delhi announced Adani Power’s Goda plant, which runs on imported coal and was built to serve Bangladesh as part of the Special Economic Zone. Under this, it enjoyed incentives like exemption from income tax and other levies.
According to the agreement between Adani Power and the state-owned Bangladesh Power Development Board (BPDB), the power supply was required to notify Bangladesh of changes in the plant’s tax status and to pass on the benefit of tax exemptions from the Indian government. 2017. However, the company did not do so, according to letters by BPDB, requesting it to return the benefits.
BPDB officials told the news agency that they never received a response from the company. Bangladesh is expecting potential savings of about $28.6 million.
Meanwhile, on October 31, Adani Power halved power supply from its Goda plant, citing a payment dispute with Bangladesh based on the calculation of electricity tariffs. According to Reuers, Adani Power turned down BPDB’s request to extend the concession offered till May. This waiver resulted in savings of approximately $13 million for Bangladesh. Adani Power said it would not consider any further concessions until the payment issue was resolved.
Adani Power claims it owes $900 million, while the BPDB estimates the debt to be around $650 million.
Shortages in power supply have particularly frustrated Bangladesh. BPDB Chair Mohammad Rezul Karim expressed anger as the move is the highest monthly payment made this year since Dhaka sent $97 million to Adani Power in October.
