Bangladesh objects to this, and wants to renegotiate the 2017 energy agreement with Adani

Bangladesh’s interim government reportedly hopes to renegotiate a 2017 multibillion-dollar agreement with Adani to supply power from its coal-fired plant in eastern India. The deal was approved by then Prime Minister Sheikh Hasina without a tender process, costing Bangladesh much more than other coal-fired power plants. The interim government accused Adani Power of violating the agreement by withholding the tax benefits the central power plant received in the deal from New Delhi.

According to a report published by Reuters, Dhaka owes several million dollars for the energy already saved. However, both sides are disputing the exact size of the bill. Bangladesh Energy Minister Mohammad Fuzul Kabir Khan said the country now has enough domestic capacity to cope without Adani supplies.

According to the report, Bangladesh plans to reopen the 25-year deal and hopes to leverage the fallout from the US indictment in the $265 million bribery scheme to push for a resolution. The Adani Group denied these accusations, calling them baseless.

An Adani Power spokesperson said the company had fulfilled all contractual obligations and they had no indication that Bangladesh had reviewed the contract.

Delhi announced that Adani Power’s Godda plant, which runs on imported coal and was built to serve Bangladesh, has become part of a special economic zone. Under this, it enjoyed incentives such as exemptions from income tax and other duties.

The power supply was required to inform Bangladesh of changes in the plant’s tax status and pass on the benefit of tax exemption from the Indian government, according to the contract signed between Adani Power and the state-run Bangladesh Power Development Board (BPDB) in 2018. However, the company did not It does so, according to BPDB letters, urging it to transfer benefits.

BPDB officials told the news agency that they have not received any response from the company. Bangladesh expects potential savings of about $28.6 million.

Meanwhile, on October 31, Adani Power cut power supply from its Godda plant by half, citing a payment dispute with Bangladesh over the calculation of power tariffs. According to Royers, Adani Power rejected a request from BPDB Bank to extend the discount offered until May. This discount saved Bangladesh approximately $13 million. Adani Power stated that it would not consider any further reductions until the payment issue is resolved.

Adani Power claims it is owed $900 million, while the Petroleum Development Bank estimates the arrears are about $650 million.

Low energy supplies have particularly frustrated Bangladesh. BPDB Bank Chairman Mohammad Razaul Karim expressed anger that the move came on the heels of Dhaka transferring $97 million to Adani Power in October, which represented the highest monthly payment made this year.