The plant, located in Jharkhand, India, supplies power exclusively to Bangladesh under a 25-year contract signed in 2017
Digital Desk: The government of Bangladesh requests Adani Power to fully resume electricity supplies its 1,600-megawatt plant in India following extended reduced supply affecting more than three months. The power generation facility located in Jharkhand to provide continuous electricity to Bangladesh according to its 2017 signed 25-year pact. In late October Adani stopped delivering half of its power supply to Bangladesh since Bangladesh experienced delays in its payments because of a foreign exchange crisis. One of the plant units had to shut down because of which the entire operation functioned at 42% capacity.
The Bangladesh Power Development Board (BPDB) identified that it spent $85 million per month to settle its debts while requesting Adani to operate the second unit of the plant. The planned synchronization of the unit was prevented because of technical problems associated with high vibrations. According to Karim who chairs BPDB the organization plans to minimize late payments while confirming that Adani presents no significant issues at present.
The power price disagreement forms a primary source of tension since the 2017 contract ties prices to dual indices resulting in Adani’s power bill costs reaching about 55% above standard Bangladesh rates for Indian electricity. The Bangladesh court appointed an expert panel to assess the contract terms which will reveal its findings during this month. The expected outcome of this process will create opportunities for new negotiations.
Bangladesh’s interim government expresses dissatisfaction with the alleged tax benefits Adani Group refused to provide at its Jharkhand plant although Adani Group denies any such contractual violations. Executive members of Adani Group faced U.S. prosecution after prosecutors identified a $265 million bribery scheme that Adani Group denied to have existed.
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