Bangladesh's interim government is reportedly looking to renegotiate a 2017 multibillion-dollar deal with Adani to supply electricity from coal-fired power plants in eastern India. The deal was awarded by then Prime Minister Sheikh Hasina without a tender process, costing Bangladesh more than its other coal-fired power plants. The interim government has accused Adani Power of breaching the agreement by not providing tax benefits for a central power plant to the deal received from New Delhi.
According to a Reuters report, Dhaka owes several million dollars for energy already supplied. However, both parties dispute the exact amount of the bill. Bangladesh's Power Minister Muhammad Fawzul Kabir Khan said the country now has enough domestic capacity to cope without Adani's supply.
According to the report, Bangladesh plans to reopen the 25-year agreement and hopes to use the fallout from the US indictment in a $265 million bribery scheme to push for a resolution. The Adani Group denied the allegations and called them baseless.
A spokesperson for Adani Power said they have confirmed all contractual obligations and there is no indication of Bangladesh reviewing the contract.
Delhi has announced Adani Power's Godda plant, which runs on imported coal, was built to serve Bangladesh as part of a special economic zone. Under this, it enjoyed incentives like income tax and other tax exemptions.
The contract signed between Adani Power and the state-run Bangladesh Power Development Board (BPDB) required the power supply to notify Bangladesh of changes in the plant's tax status and provide the benefit of tax exemption from the Indian government. 2017. However, the company did not do so, according to BPDB's letters asking it to remit the returns.
BPDB officials told the news agency that they never received a response from the company. Bangladesh expects savings of about $28.6 million.
Meanwhile, on October 31, Adani Power halved electricity supply at its Goda plant, citing a payment dispute with Bangladesh based on calculation of power tariffs. According to Reuers, Adani Power declined BPDB's request to extend a rebate until May. This discount saved Bangladesh approximately $13 million. Adani Power said it would not consider further discounts until the payment issue was resolved.
Adani Power says it owes $900 million, while BPDB's arrears are estimated to be around $650 million.
The reduction in power supply has particularly frustrated Bangladesh. BPDB chairman Md Rezaul Karim expressed anger at the move, which came after Dhaka remitted $97 million to Adani Power in October, marking the highest monthly payment made this year.