India's Adani Group has warned Bangladesh's new government that its overdue payments for coal power supply from the Godda plant have become "unsustainable", international media reports.
"We are in constant dialogue with the Bangladesh government and have appraised them of this unsustainable situation where we are meeting not just our supply commitment but also [commitments] to our lenders and suppliers in spite of rising receivables," the Adani Power in a statement said, It, however, added that the group would "continue to supply reliable and competitively priced power from our Godda facility to Bangladesh, despite mounting dues".
However, Adani's power generating unit has racked up unpaid dues of as much as $800 million.
Bangladesh Bank Governor Ahsan H Mansur told international media that "If we don't pay them (Adani), they will stop providing electricity", the media quoted.
Adani's alone supplies around one-tenth of Bangladesh's total power need. And its impact can be seen in the average power generation cost in the country.
In a reply with the media, the Interim government's Energy and Power Adviser Muhammad Fouzul Kabir Khan has said that the government had approached lenders including the World Bank for billions of dollars in loans to help stabilise its finances.
"Bangladesh is late on paying $492mn to Adani, to whom it owes as much as $800mn in total," he said, adding that the interim government "Since joining [the government], we've been firefighting," Khan said.
Adani Group says Bangladesh's $500 million debt from Godda power plant 'unsustainable'
According to official data, Bangladesh bought Adani's power for Tk14.02 per kilowatt-hour (or a unit) in 2023. Bangladesh bought another 1,100MW power from India's electricity exchange market at Tk7.83 per unit.
With Bangladesh buying some of its power from India's electricity exchange market at almost half the price of Adani coal power plant, the power deal with the Indian power giant has come into question that had a significant role in increasing Bangladesh's power price by as much as 8 per cent, the report said.
Whereas average generation cost was Tk5.91 per unit five years back, and Tk8.84 in 2021-22, it has become Tk11.03 per unit now.
However, Adani's power is not the only factor in such an increase. Payra power plant and Rampal power plant's power contracts have contributed to this situation.
Even before commercial supply began in April last year, power officials had raised concerns over the Adani plant's coal pricing formula and requested a revision of the power purchase agreement.
The rationale of the power purchase agreement (PPA) with Adani was questioned soon after it was signed in Dhaka in November 2017, when the country already had higher installed capacity than actual generation.
By the time Adani power started flowing into Bangladesh, the installed capacity rose to 24,911MW in June 2023, with peak generation reaching 15,648MW in that fiscal year.
On 29 May, India's Adani Group Director Pranav Adani met the then finance minister Abul Hassan Mahmood Ali requesting quick clearance of outstanding electricity bills amounting to around $700 million.
Energy expert Prof M Tamim said the Adani power deal requires scrutiny.
"I don't know what is inside the agreement. If there is any serious lack of fairness and equity, it definitely calls for a review."
"It depends on the type of the contract. All such deals are expected to be balanced, protecting the investors as well as being win-win for all parties," he said.
