The interim government of Bangladesh, led by Muhammad Yunus, is set to scrutinise Indian businesses, including the Adani Group, which exports power from its Jharkhand unit under a 2017 agreement. The government aims to assess whether the terms of the power deal and the prices paid are justified.

“There will be scrutiny of Indian businesses, like the Adani business… what kind of contracts have been signed, what are the terms and conditions, one cannot have a foreign company not follow the law of the land,” a senior functionary of the interim government said, speaking anonymously. The official added, “Investigations will be done. It will be painted as targeting Indian businesses, no… they will be scrutinised for what they are doing here, how much is Bangladesh paying, is it justified, all these questions will come up.”

In November 2017, Adani Power (Jharkhand) Ltd (APJL) signed a 25-year Power Purchase Agreement (PPA) with the Bangladesh Power Development Board (BPDB) for 1,496 MW of power. Under the agreement, Bangladesh would purchase 100% of the electricity produced by Adani’s Godda plant, which operates using imported coal. The Godda plant was declared a Special Economic Zone in 2019, became fully operational in April 2023 and now supplies 7-10% of Bangladesh’s base power load.

In the financial year 2023-24, the Godda plant exported approximately 7,508 million units of electricity, which accounts for 63% of India’s total power exports to Bangladesh. The value of these exports has crossed $1 billion, making up 10% of India’s overall exports to Bangladesh.

An Adani Power spokesperson responded, saying, “We have no information of the Bangladesh government reviewing our PPA. In the spirit of true partnership, we continue to supply power to them despite the massive outstanding owed to us. We are in constant engagement with the Bangladesh authorities and have requested them for early liquidation of our dues as it is making our operations unsustainable.”

Reports from The Financial Times on September 9 indicated that Adani had warned the Bangladesh interim government about the unsustainability of overdue payments exceeding $500 million. Bangladesh energy advisor Muhammad Fouzul Kabir Khan noted that the country’s total power liabilities stood at $3.7 billion, with $492 million in arrears to Adani, out of a total debt of $800 million.

To mitigate payment delays, the Indian government amended a 2018 regulation in August, allowing plants like Adani’s to connect to the Indian grid, enabling domestic power sales in case of prolonged non-scheduling by Bangladesh.

The Bangladesh Power Development Board's annual report showed that during 2022-23, the average cost of electricity imported from Indian companies was 8.77 Bangladeshi Taka per unit. However, this varied by company, with Adani Power (APJL) charging 14.02 Taka per unit.

Regarding India-Bangladesh ties, the interim government functionary commented, “We want to have a stable, neutral relationship with India.” The official also raised concerns about former Prime Minister Sheikh Hasina’s presence in India, claiming, “She is being given space for doing activities against Bangladesh.”

Addressing the economic situation, the functionary said, “Hasina has left the administration rotten, finances are rotten, corruption is rampant… We have to first start the engine, make it work, and then go ahead.”

Image source: Indian Express