India changes power export contract rules in potential gain for Adani, but Adani committed to supply power to Bangladesh
Adani Power says India is not obligated to buy power from them even though the rules now allow companies with 100% power export contracts to sell domestically
Adani Power is committed to supply electricity to Bangladesh, Reuters reported citing a company statement, which added that the recent amendment to power export rules does not affect its existing contract.
Billionaire Gautam Adani speaks during an interview at his office in the western Indian city of Ahmedabad April 2, 2014. (Amit Dave/Reuters)
India introduced new rules for electricity producers who export their power, allowing them to sell in the domestic market too, in cases of consistent drops in offtake or payment defaults, according to a Bloomberg report, which added that this could benefit Adani Power's 1.6-gigawatt Godda plant in Jharkhand, since it exports electricity to Bangladesh.
Why would Adani Power benefit from the new rules?
Adani Power's Godda plant is the only one in India under contract to export 100% of its power to a neighbouring country.
{{^htLoading}} {{/htLoading}}
{{^usCountry}}
The Godda plant has seen arrears piling up and payments coming with a lag of 4-5 months, according to the Bloomberg report.
{{/usCountry}}
{{#usCountry}}
The Godda plant has seen arrears piling up and payments coming with a lag of 4-5 months, according to the Bloomberg report.
The new rule could also potentially benefit future power projects where all output is locked into export contracts, by allowing the supplier to hedge using the domestic market.
However, the Reuters report quoted Adani Power as saying that though the amendment facilitates connectivity to the Indian grid, it does not impose any obligation on India to buy electricity.
When did the new rule come about?
{{^htLoading}} {{/htLoading}}
This came nearly a week after Prime Minister Sheikh Hasina had to flee Bangladesh and seek refuge in India due to the massive protests triggered by government job quotas.
Though an interim government has been placed in Dhaka, risks of political uncertainty continue to persist.
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.
Stay updated with the latest Business News, stock market updates, petrol and diesel prices, gold and silver rates, income tax updates and major developments from India and across the world.
Stay updated with the latest Business News, stock market updates, petrol and diesel prices, gold and silver rates, income tax updates and major developments from India and across the world.
Home/Business/India changes power export contract rules in potential gain for Adani, but Adani committed to supply power to Bangladesh
{{^htLoading}}
Advertisement
{{/htLoading}}
SHARE THIS ARTICLE ON
{{#usCountry}}{{/usCountry}}
Hindustantimes wants to start sending you push notifications. Click allow to subscribe
