The interim government in Bangladesh, led by Nobel laureate Muhammad Yunus, has decided to scrutinize agreements with Indian businesses, including the Adani Group, The Indian Express reports. This move comes after Adani Power requested the Bangladesh government to expedite the clearance of $800 million in dues owed by the Bangladesh Power Development Board (BPDB) for electricity supplied by Adani.
The Bangladeshi government seeks to review the terms of contracts to ensure that the prices being paid for power supply are justified. A senior official stated, “There will be scrutiny of Indian businesses like the Adani business… one cannot have a foreign company not follow the law of the land.” This review also includes power supply agreements with other Indian firms such as PTC India, NVVL Ltd, and Semcorp Energy India.
Adani Power’s Godda plant in Jharkhand, with a 1,600 MW capacity, has a 25-year power purchase agreement with BPDB to supply 1,496 MW of power, accounting for approximately 10% of Bangladesh’s peak demand. The deal was signed in November 2017 under the now-ousted Sheikh Hasina-led government. Adani charges 14.02 Bangladeshi Taka per unit, while the average tariff from other Indian firms is 8.77 Bangladeshi Taka.
With an average monthly billing between $90 to $100 million, Adani Power continues to supply electricity, but has pressed for its dues to be cleared promptly to avoid a crisis. The political situation has shifted following the exit of Sheikh Hasina, who fled to India after stepping down amidst student protests. The interim government has called for her extradition to face trial.
This review could have significant implications for the future of Indian business interests in Bangladesh, especially as the government ensures that foreign companies adhere to local regulations and fair pricing.
