Bangladesh looks to reduce power prices of Adani deal amid US indictment: Report

Bangladesh is planning to renegotiate lower power prices from the Adani Group as it tries to reduce its subsidising expenditure for the electricity

Bangladesh is reportedly looking to renegotiate much lower prices for electricity it purchases from the Adani Group as it tries to reduce its expenditure for subsidising the expensive electricity for the public.

This is unless a Bangladesh court completely cancels the 25-year deal signed in 2017 with Adani Power for getting coal-fired power from a $2 billion plant in eastern India (AFP)

This is unless a Bangladesh court completely cancels the 25-year deal signed in 2017 with Adani Power for getting coal-fired electricity from a $2 billion plant in eastern India, according to a report by news agency Reuters.

All of this comes at a time when the Adani group is currently facing allegations from US officials of a $265 million bribery scheme which it has denied being part of.

The government wants lower prices because Adani charged the highest rate for Indian power to Bangladesh at 14.02 taka a unit compared to the 8.77 taka average price during the financial year 2022-23. In 2023-24, it reduced to 12 taka a unit.

This is while the retail price is 8.95 taka a unit, which ends up in a 320 billion taka cost for the government to subsidise the electricity.

This also comes in the middle of the High Court calling for an investigation into the 25-year deal signed in 2017 with Adani Power for getting coal-fired power from a $2 billion plant in eastern India, according to the report which cited Bangladesh's energy minister.

The investigation into the deal which currently meets a tenth of Bangladesh's power needs is expected to conclude in February 2025.

"Renegotiate in case of anomalies in the contract. Cancel only in case of irregularities such as corruption and bribery," the report quoted Muhammad Fouzul Kabir Khan, Bangladesh's power and energy adviser, as saying in an interview.

This comes at a time when the Group recently halved its supply due to delay in receiving payments from the country which has just seen an overthrow of its government which used to be led by Prime Minister Sheikh Hasina.

Khan also said that Bangladesh has enough domestic capacity to meet its needs despite some plants being currently idle or generating below capacity because of fuel shortages or other reasons, adding, “When Adani cut their supply to half, nothing happened. We will not allow any power producer to blackmail us,” according to the report.