Why Do Disagreements Persist Even After Adani Restores Full Power to Bangladesh 3 Months Later?

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Adani Restores Full Power
(C): Twitter-@jschanan

The 1,600 MW of power supply to Bangladesh for the winter has been partially restored but they have also announced the full resuming of supply in view of the summer. Again, the supply from Adani Power since October 31st 2024 has been cut down by half. This was due to delays in payments owing to Bangladesh’s shortage of foreign exchange. This meant one of the two units of Adani’s Jharkhand plant used exclusively for power supply to Bangladesh had to be shut down. During this time, BPDB managed to cope with reduced imports hence relying more on renewable energy. 

Ongoing Disputes Despite Resumed Supply:

Even with the supply of electricity, some disputes between Adani Power and the BPDB have not been settled yet. A major point of contention is the issue of outstanding payments with Adani Power claiming BPDB owes it about $900 million while BPDB agrees to only about $650 million. 

This discrepancy has been a major point of contention. In addition to tariff calculations that has also sparked disagreements. The tariff was one based on an average of two indexes in the 2017 power purchase agreement so Adani’s electricity cost is almost 55% higher than that from the average of all Indian sources supplied to Bangladesh. 

To ease its financial burden, BPDB has sought to renegotiate these terms. Another main concern is the request from BPDB for Adani Power to pass on to them tax benefits received from the Indian government and reinstating a discount program which expired in May 2024.

Adani Power has rejected these claims and persists on going by the original contract.

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