News Brief
Vansh Gupta
Feb 11, 2025, 05:06 PM | Updated 05:06 PM IST
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After more than three months of reduced electricity supply, Bangladesh has asked Adani Power to fully restore power generation from its 1,600-megawatt plant in Jharkhand, a Bangladesh Power Development Board (BPDB) official confirmed, as reported by The Hindu.
The supply has been halved since 31 October 2024, due to low winter demand and payment delays caused by Bangladesh’s foreign exchange shortage.
Adani Power, which signed a 25-year agreement with Bangladesh in 2017 under former Prime Minister Sheikh Hasina, operates a $2 billion plant in Godda, Jharkhand, dedicated exclusively to supplying power to Bangladesh.
The plant has two units of 800 megawatts each, but one remained shut since 1 November, reducing operations to about 42 per cent capacity.
BPDB Chairperson Md. Rezaul Karim stated that Bangladesh is now paying Adani $85 million per month to clear outstanding dues and has instructed the company to resume supply from the second unit.
“As per our requirement today, they have planned to synchronize the second unit, but due to high vibration, it didn’t happen,” Karim told Reuters on 10 February, citing technical difficulties in restarting the unit.
Despite the payment backlog, he emphasised that there is "no big issue with Adani” now, and BPDB remains committed to reducing overdue payments. Officials from both BPDB and Adani Power were scheduled for a virtual meeting on 11 February to address remaining concerns.
At the heart of the issue lies a dispute over electricity pricing. According to Reuters, Adani’s power costs Bangladesh 55 per cent more than the average of other Indian power exports to Dhaka. The 2017 agreement priced tariffs based on an average of two indexes, leading to higher costs for Bangladesh.
A Bangladesh court has ordered an expert committee to review the contract, with findings expected this month. This review could potentially lead to renegotiations of the power-purchase agreement.
Additionally, Bangladesh’s interim government had previously accused Adani of breaching contractual terms by not passing on tax benefits received from the Indian government, Reuters reported in December 2024. However, Adani Power maintains that it has upheld all contractual obligations.
The situation is unfolding against the backdrop of legal and political challenges for the Adani Group. In November 2024, US prosecutors indicted Adani Group founder Gautam Adani and seven other executives over their alleged involvement in a $265 million bribery scheme in India — charges the Adani Group has dismissed as "baseless.”
Meanwhile, Bangladesh’s government-appointed expert panel is reviewing major energy contracts signed by Sheikh Hasina, who had fled to New Delhi in August after violent student-led protests.
Vansh Gupta is an Editorial Associate at Swarajya.