Adani Power’s Godda plant in Jharkhand. File
| Photo Credit: adanipower.com

Bangladesh has asked Adani Power to fully resume supplies from its 1,600-megawatt plant in Jharkhand, a Bangladesh official said, after more than three months of reduced sales with supplies halved due to low winter demand and payment disputes.

Adani, which signed a 25-year contract under former Prime Minister Sheikh Hasina in 2017, has been supplying power from its $2 billion plant in Godda, Jharkhand. The plant, with two units each of 800 megawatts capacity, sells exclusively to Bangladesh.

The 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 unit on November 1, resulting in the plant operating at about 42% capacity.

Subsequently, Bangladesh told Adani to keep supplying only half the power.

‘No issue with Adani’

The state-run Bangladesh Power Development Board (BPDB) said it had been paying $85 million a month to Adani to clear outstanding dues and has now told the company to resume supply from the second unit.

“As per our requirement today, they have planned to synchronise the second unit, but due to the high vibration, it didn’t happen,” BPDB Chairperson Md. Rezaul Karim told Reuters, referring to some technical problems that stopped the unit from restarting on Monday (February 10, 2025).

“Right now, we are making a payment of $85 million per month. We are trying to pay more, and our intention is to reduce the overdue. Now there is no big issue with Adani.”

BPDB and Adani officials were due to meet virtually on Tuesday (February 11, 2025) following another meeting recently to work out various issues between them, said a source with direct knowledge of the matter who did not want to be named as he was not authorised to talk to the media.

An Adani Power spokesperson did not immediately respond to a request for comment. 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.

Pricing dispute

The pricing dispute revolves around how power tariffs are calculated, with the 2017 agreement pricing off an average of two indexes. Adani’s power costs Bangladesh about 55% more than the average of all Indian power sold to Dhaka, Reuters has reported.

A Bangladesh court has ordered an examination of the contract with Adani by a committee of experts, with results expected this month. This could potentially lead to contract renegotiations.

Last year, Bangladesh’s interim government accused Adani of breaching the power-purchase agreement by withholding tax benefits that the Jharkhand plant received from New Delhi, Reuters reported in December citing documents. Bangladesh officials also said they were reviewing the contract.

A spokesperson for Adani told Reuters at the time that it had upheld all contractual obligations with Bangladesh and had no indication Dhaka was reviewing the contract.

Mr. Karim has not replied to Reuters‘ questions on whether the two sides have resolved their differences.

In November, U.S. prosecutors indicted Adani Group founder Gautam Adani and seven other executives for their alleged role in a $265 million bribery scheme in India. Adani Group has called the U.S. allegations “baseless”.

In September, the Bangladesh government appointed a panel of experts to examine major energy deals signed by Ms. Hasina, who fled to New Delhi in August after deadly student-led protests.

Adani Power, a part of the Adani conglomerate, had started supplying power to Bangladesh in April 2023. File 
| Photo Credit: Reuters

Indictment of Gautam Adani and several top officials of the Adani conglomerate in the U.S. may become a factor in future negotiations between the Adani Group and the interim government in Bangladesh, energy experts in Dhaka have said. The criminal proceedings against Mr. Adani came a day after the high court in Dhaka ordered a probe into the 1,600-megawatt power deal that allowed the Adani Group to export electricity from its Godda power plant to Bangladesh.

“The energy agreement between Adani and Sheikh Hasina government was controversial from the beginning as this contract, like many other energy contracts of Hasina years, was not done through tendering. Despite that the interim government had taken a positive approach and tried to continue dialogue. But after the U.S. indictment, that space of dialogue may shrink as the group is likely to face greater pressure from Bangladesh to compromise on pricing,” said Dr. Ijaz Hossein, retired professor of BUET (Bangladesh Institute of Engineering and Technology).

The Ministry of External Affairs did not comment on the ongoing uncertainty over Adani Power in Bangladesh. Officials pointed out, however, that India had continued to supply electricity under the G2G agreements, and would not intervene unless required in the arrangements with a “private” company. 

Adani Power Ltd., (APL) a part of the Adani conglomerate, had started supplying power from the first 800 MW ultra-super critical thermal power generation unit in Jharkhand in April 2023. The ambitious project aimed to cater to the growing energy market of Bangladesh, which had become an attractive destination of international energy majors. Dr. Hossein pointed out that Adani offered a deal that appeared interesting in the beginning as it promised to bring coal from Australia and Indonesia to meet Bangladeshi demand. Bangladesh lacked a deep sea port to handle large coal shipments and Adani’s offer made sense. “However, critics here had started saying that Adani, which apparently received government subsidy in India, did not transfer that benefit to Bangladesh,” said Dr. Hossein.

The project’s pricing was an issue even during Ms. Hasina’s tenure though it is believed that the matter was handled to Adani’s advantage because of better political relations between India and Bangladesh under Ms. Hasina. In February 2023, Bangladesh Power Development Board had written to Adani Power seeking revision of the price. Adani had quoted $400 per metric tonne (MT), but BPDB argued it should be less than $250/MT as that was the price they had paid for other coal-fired power plants.

Adani’s 2017 power deal with Bangladesh faced a major challenge with the fall of the Hasina government on August 5. With the fall of the Awami League government, several energy projects, especially coal power plants came under scrutiny. A special committee under the leadership of noted economist Debopriyo Bhattacharya was formed after the fall of the Hasina government and a team under Dr. Bhattacharya had started scrutinising all power agreements under Hasina government that included the deal with Adani.

Despite negative public sentiment, the interim government under Mohammad Yunus however maintained dialogue with Adani Power, which had at a point threatened to suspend power supply over unpaid dues. The interim government subsequently promised to process ₹1,450 crore allowing continued supply to Bangladesh. The latest move by the high court ordering a high-level probe into the deal has come as a twist in the plot as it will give Dhaka another opportunity to relook at the entire energy deal.

Adani Power Limited’s bank loan facilities were rated ‘A’ with a stable outlook earlier.
| Photo Credit: Photo Credit: X/@CRISILLimited

Crisil Ratings has upgraded its ratings on Adani Power Limited’s (APL) ₹38,000 crore of bank loan facilities to ‘AA-‘, saying the business and financial risk profile of the company has seen “strong improvement”. The loan facilities were rated ‘A’ with a stable outlook earlier.

“The rating upgrade follows the strong improvement in the business and financial risk profiles of APL,” Crisil Ratings said in a report.

“The upgrade is driven by better-than-expected operating performance backed by timely commissioning and ramp-up of the Godda power plant (1.6 GW), Mahan power plant (1.2 GW), full recovery of pending regulatory dues related to claims for fuel costs as pass-through under change in law clauses of existing power purchase agreements (PPAs) and continued improvement in receivables,” it said.

“The rating also factors in the completion of most of the regulatory investigations into Adani Group. Regulatory investigations in two remaining allegations are under way and are expected to be completed over the next three months,” the ratings agency said.

It further said that APL has recovered a majority of pending regulatory dues, including carrying costs and late payment surcharge (LPS) between April and October 2023 from counterparties, post-resolution of the matter in APL’s favour through the order of Supreme Court of India in March and April 2023.

“The company has been receiving monthly receivables on a timely basis, including recurring regulatory claims, supporting its operating cash flow. The operating performance of APL has been strong with robust plant load factor (PLF) and healthy operating margin,” it said.

The company had better-than-expected operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of ₹10,041 crore for fiscal 2023 and ₹7,926 crore for the first half of fiscal 2024 (₹10,280 crore in fiscal 2022).