Adani to restore full power to Bangladesh in days but differences remain, say sources

Adani Power has agreed to fully restore supply from a 1,600 MW India power plant to Bangladesh in a few days after a gap of three months but has rejected Dhaka’s request for discounts and tax benefits, two sources told Reuters.

Billionaire Gautam Adani’s company halved supply to Bangladesh on October 31 due to payment delays as the country battled a foreign exchange shortage. This led to the shutdown of one of the two equal-sized units of the plant on November 1, followed by Bangladesh’s request to keep supplying only half the power, citing low winter demand and as the payment issue bubbled.

Ahead of summer demand and on Bangladesh Power Development Board’s (BPDB) request, Adani Power has agreed to resume full supplies by next week, said the two sources who had direct knowledge of the matter but declined to be named as they were not authorised to talk to the media. The plant in eastern India sells only to Bangladesh.

Adani Power, however, has not agreed to meet several other demands from BPDB, including giving discounts and concessions potentially worth millions of dollars to Bangladesh, said the sources. The two sides had a virtual meeting on Tuesday and more are likely to carry on the discussions.

“They don’t want to give up on anything, even $1 million,” said one of the sources, referring to Adani Power. “We have not got any concessions. We want a mutual understanding, they are invoking the power purchase agreement.”

BPDB Chairperson Md. Rezaul Karim did not respond to questions about the differences. He told Reuters earlier this week that “now there is no big issue with Adani” and that full power supply was going to begin, while he tried to step up payments beyond $85 million a month.

An Adani Power spokesperson did not immediately respond to a request for comment. The company said in a statement following a Reuters story on Tuesday that “dispatch of power by a power generator is dependent on the procurers’ requirements, which keep changing”.

In December, an Adani source said BPDB owed the company about $900 million, while Karim said at the time the amount was only about $650 million. The pricing dispute revolves around how power tariffs are calculated.

BPDB earlier wrote to Adani Power seeking tax benefits worth millions of dollars and resumption of a discount programme that ran for a year until May.