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Adani Power says no indication of Bangladesh reviewing power deal

investing.com 02/12/2024 - 06:52 AM

Adani Power and Bangladesh Power Purchase Agreement

By Krishna N. Das
(Reuters) – Adani Power (NS:ADAN) announced on Monday that it has received no indication that the Bangladesh government is re-evaluating a power purchase agreement with the company. This comes a day after Reuters reported that Bangladesh aims to renegotiate the deal.

On Sunday, it was reported that Bangladesh seeks to significantly reduce prices in its agreement with the Adani Group, unless the deal is annulled by a court that has initiated an investigation into the 25-year agreement.

Last week, the High Court mandated a committee of experts to review the contract, under which Adani Power supplies electricity from a $2 billion coal-fired plant located in eastern India.

Currently, Adani Group founder Gautam Adani is facing allegations from U.S. authorities regarding involvement in a $265 million bribery scheme in India, which he denies. Meanwhile, one Indian state is reviewing a power agreement with the group, and France's TotalEnergies (EPA:TTEF) has suspended its investments.

The Bangladesh agreement was established in 2017 by Adani with a government entity during the administration of Prime Minister Sheikh Hasina, who was recently removed from power amid public unrest and corruption allegations.

Adani Power is pursuing over $800 million in overdue payments from Bangladesh and has been supplying between 700 MW and 750 MW of power from a capacity of about 1,400-1,500 MW as of early August.

Despite accumulating dues, which raise concerns over the sustainability of operations, Adani Power continues to supply electricity to Bangladesh. A spokesperson for the company stated that they are in regular communication with senior officials from the Bangladesh Power Development Board (BPDB) and the Bangladeshi government, who have assured that the outstanding payments will be settled soon.




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