Bangladesh Likely to Keep Power Deal with India’s Adani, Sources Say

Wedoany.com Report-Oct 11, Bangladesh is likely to set aside pricing concerns and retain a power purchase pact with India’s Adani Power (ADAN.NS),  in the face of supply worries and gloomy prospects for a legal challenge, two sources with direct knowledge of the matter said.

The new government has set up a panel to gauge whether its predecessor's contracts adequately protected the nation's interests, particularly projects faulted for lack of transparency that were initiated under a special expediting law.

One contract being scrutinised over price concerns is a 2017 deal to buy electricity for 25 years from Adani's $2-billion, 1,600-MW power plant in India's eastern state of Jharkhand that exclusively supplies Bangladesh.

The project meets nearly a tenth of Bangladesh's demand for power, so cancelling the Adani deal outright would be difficult, however, said one of the sources. Both spoke on condition of anonymity as the matter is a sensitive one.

Also, a legal challenge in an international court was likely to fail without strong evidence of wrongdoing, the source added.

While an exit may not be possible, the only feasible option could be a mutual agreement to reduce the tariff, the second source said.

Asked for comment on the remarks, Muhammad Fouzul Kabir Khan, the power and energy adviser, or de facto minister in the interim government, said, "The committee is currently reviewing the matter, and it would be premature to comment."

Adani has had "no indication" that Bangladesh is reviewing the agreement, a spokesperson in India said.

"We continue to supply power to Bangladesh despite mounting dues, which are of significant concern and are rendering plant operations unsustainable," the spokesperson said.

Dhaka is struggling to clear dues of $800 million to Adani Power, among more than $1 billion owed to Indian power companies, because of difficulty in accessing dollars to make payment.

"We are in constant dialogue with senior officials of the Bangladesh Power Development Board and the government, who have assured us our dues will be cleared soon," the Adani spokesperson added.