Bangladesh Requests Full Power Supply Restoration from the Adani Group
The Bangladesh Government is currently looking for a full restoration of power supply from Adani Power three months after it was reduced to half because of pending dues. The state-run Bangladesh Power Development Board (BPDB) has recently mentioned that it has expedited the clearing of the outstanding dues to Adani Power, the energy wing of the Adani Group. It has also requested the company to resume power supply from the second unit of the Godda power plant in Jharkhand.
The BPDP and Adani Power officials are set to hold a virtual meeting to address the various issues concerning the Adani Bangladesh project and ensure that the bills are paid on time. Once the dues are cleared, the Adani Group will resume full power supply from its 1,600 MW Godda power plant. The global business group will also be able to ensure that Bangladesh’s growing power demands are met. The enhanced business relationship between India and Bangladesh will also continue to exist.
The Adani Bangladesh Project: The Adani Group’s First Transnational Power Project
Over the past few days, there has been a lot of controversy regarding the power supply to Bangladesh from the Adani Godda power plant in Jharkhand. In November 2017, Adani Power entered into a 25-year power purchase agreement (PPA) with BPDB under the Government of then-Prime Minister Sheikh Hasina for the Adani Bangladesh project. Under this deal, the Indian conglomerate had built a thermal power plant in the Indian state of Jharkhand having a capacity of 1,496 MW. As per the power purchase agreement (PPA), this plant is supposed to supply electricity exclusively to Bangladesh through a 400kV DC transmission line.
The electricity supply from the power plant began in June 2023. This power plant has been designed with highly advanced technology to ensure minimum power wastage. It also produces power in such a way that the impact on the environment is reduced to a minimum. The power supply continued in Bangladesh for quite a few months. This ensured that the growing power demands in Bangladesh were easily met. Various industrial activities are also triggered in different corners of Bangladesh.
The Controversies Surrounding The Adani Bangladesh Project:
A few months after the Adani Group had started supplying power from the Godda power plant, Bangladesh was overcome with political turmoil and financial distress. This resulted in the Prime Minister Hasina getting ousted. A new interim government took power last year. Because of these ongoing issues, the Bangladesh government was no longer in a position to pay for the power being supplied by the Adani Group. As a result, the country’s overdue payments for power supplied by Adani Power began to accumulate, reaching as high as 843 million USD in November 2023.
The Adani Group constantly requested the Bangladesh government to clear the outstanding dues. However, when no such actions were taken, Adani Power started reducing the electricity power to Dhaka. During Adani Power’s third-quarter earnings call, the company CEO confirmed that around 800 million USD remained unpaid by Bangladesh. The unpaid payment stands at 700 million USD. Additionally, there is a 100 million USD difference because of reconciliation issues as the country has not accounted for the late payment surge.
The Current Dues:
As of now, it can be said that Bangladesh still owes around 700 USD to the Adani Group. The BPDB officials have highlighted that Bangladesh is currently paying 850 million USD per month to Adani Power. The country will try to pay more in the upcoming months to reduce the overall due amount. Once the dues are cleared, the Adani Group will be able to get to the position of consistently supplying power from the Adani Godda Power plant to Bangladesh. This will ensure that the long-standing power project is still executed seamlessly. Bangladesh’s growing power demands will be met. The country will also be able to walk towards enhanced prosperity.
Conclusion:
The Adani Bangladesh project is one of the most striking projects taken up by the Adani Group in the power sector. Although the project operations have been met with a lot of hindrances, yet the Adani Group has managed to supply power to Bangladesh from its power plant in Jharkhand. Once the issues are resolved, it is expected that the group will once again restore full power supply to Bangladesh, ensuring that the people’s lives once again get back to normalcy.
