India's Adani Power said on Monday it has opted for an international arbitration process to resolve disputes over Bangladesh's power supply payments.
The company led by Indian billionaire Gautam Adani has been at loggerheads with Bangladesh Power Development Board over pending payments for the electricity it supplies as part of a pact that both sides had signed in 2017, reports Reuters.
"There are disagreements in the way certain cost elements are calculated and billed. Hence, both partners have agreed to invoke the dispute resolution process and are confident of a quick, smooth and mutually beneficial resolution," an Adani Group spokesperson said in a statement.
However, Bangladesh's de-facto power minister Muhammad Fouzul Kabir Khan told Reuters that negotiations are still on. "Once that process is over, we will move toward international arbitration, if needed," he said.
Adani Power supplies electricity from its coal-fired 1,600 megawatt Godda power plant in eastern India, which meets nearly a tenth of Bangladesh's power needs.
Bangladesh's interim government had accused Adani of breaching the power purchase agreement by withholding tax benefits that the Godda plant got from India, Reuters reported in December.
Bangladesh paid Adani a tariff of 14.87 taka ($0.1220) per unit during the fiscal year to June 30, 2024, higher than an average of 9.57 taka for power supplied by other Indian companies.
Adani Power had last week said its power dues from Bangladesh had narrowed significantly to equivalent of 15 days of tariff, down from about $900 million in May, and nearly $2 billion early this year.
"Adani Power reaffirms its commitment to the PPA (power purchase agreement) and will continue to support Bangladesh by supplying reliable, cost-competitive and high-quality power," the company said on Monday.
