Pranav Vinod Adani, director of Adani Enterprises, called on Finance Minister Abul Hassan Mahmood Ali on Wednesday to discuss outstanding electricity bill dues.
Pranav arrived in Dhaka and held the meeting with the finance minister at the secretariat in the afternoon, according to sources from the finance ministry.
Joining Pranav at the meeting were four key officials from the Adani Group - Anil Sardana, SB Khyalia, Vipul Jadhav, and Abhishek Tyagi.
While the meeting was primarily a courtesy call, sources indicated that Pranav urged the finance minister to expedite the payment of outstanding dues owed by the Bangladesh Power Development Board (BPDB) for electricity supplied by Adani Power. The business conglomerate emphasised the need for this payment before the end of the current financial year 2023-2024.
According to BPDB, Bangladesh had outstanding dues of approximately Tk 5,500 crore for electricity purchased from India as of February. Of this amount, Tk 3,637 crore is owed to Adani Power. However, this does not represent the total outstanding amount, as Adani Group is expected to receive additional payments for electricity sales to Bangladesh.
Sources noted that Adani Power has outstanding bills for partial payment from September and full bills from October 2023 to February 2024, totalling Tk 3,637 crore. The outstanding dues will increase further when adding the amounts for March-May 2024.
To meet Bangladesh's electricity demand, BPDB signed a 25-year power purchase agreement with the Adani Group in 2017. Under this agreement, BPDB bears the fuel costs of power generation from the synchronisation of the first unit until the commercial operation date (COD).
However, BPDB has raised concerns about the price of imported coal for the Adani power plant, and many have commented that the agreement with Adani Group is not in Bangladesh's best interest.
BPDB’s independent power producer (IPP) cell reported that global coal prices have dropped to below $140, yet the cost per unit of electricity from Adani Group remains over Tk 12. There are allegations that Adani Group is billing for low-cost coal at higher prices, increasing the electricity cost.
An official from BPDB, seeking anonymity, said that Adani Group is billed at the same rate as other domestic coal-fired power plants (Payra and Rampal), attributing the higher costs to the depreciation of the taka against the dollar.
Adani Group's annual report indicated that Adani Power Limited achieved record profits in 2023, with Tk 5,000 crore coming from the Godda Thermal Power Station in Jharkhand, which supplies power to Bangladesh.
To ensure uninterrupted power supply, the Ministry of Power requested a subsidy waiver from the Ministry of Finance in April, 2024, under the revenue budget for the fiscal year 2023-24.
BPDB stated that Tk 17,701 crore is needed for subsidies for four months (March-June 2024), including about $1.03 billion for foreign outstanding bills and about Tk 9,000 crore for domestic bills.
Despite a severe dollar crisis, Bangladesh Bank approved payments of over $1.12 billion for electricity charges under purchase agreements with foreign companies from June 2023 to May 2024.
Power Division sources revealed that as of February 2024, Tk 4,000 crore is required for March, Tk 4,500 crore for April, Tk 4,500 crore for May, and Tk 4,701 crore for June. Bonds have already been issued to pay the subsidy money for electricity due to the cash crunch.
As of January 2024, the total unpaid bills for government and private power generation companies, including Adani Group, amounted to Tk 42,707.16 crore, with an additional Tk 16,799 crore in unpaid bills for state-owned power generation companies and domestic import-dependent coal-based power generation companies.
