The Bangladesh-Adani Group power purchase agreement has come under the radar after a writ petition was filed in the country’s high court for reevaluation of terms or cancellation of the deal
Bangladesh government will form a high-level inquiry committee, consisting of energy and legal experts, to re-examine the country’s power purchase agreement (PPA) with the billionaire Gautam Adani-led Adani Group signed in 2017. The move has been directed by Bangladesh’s high court on Tuesday. A two-judge bench comprising Justice Farah Mahbub and Justice Debasish Roy Chowdhury asked the government to submit the committee’s report within two months, Bangladesh’s news agency UNB reported.
Additionally, the HC ordered the government to submit all documents related to the 25-year deal between the power division and Adani Group in a month’s time.
The HC’s directive came after a writ petition was filed by the country’s Supreme Court lawyer M. Abdul Qaiyum in the public interest. Qaiyum had earlier sent a legal notice to the chairman of Bangladesh power development board (BPDB) and the secretary to the ministry of power and energy and sought reevaluation of the terms of the PPA or cancellation of the deals, the UNB reported.
The PPA agreement signed between the Adani Group and Bangladesh’s Awami League government headed by former Prime Minister Sheikh Hasina required the former to export electricity to the country. The conglomerate had set up the Godda electricity plant in the state of Jharkhand to supply 100 per cent of the power generated by it to the neighbouring country.
Bangladesh is facing hardship in repayment due to the economic crisis. Moreover, reportedly the company sold electricity to Bangladesh at a 27 per cent higher rate than charged by other Indian private producers; this brought the deal to the country’s interim government’s scanner.
The troubles mounted for the country as it was unable to repay debts worth around $800 million for power imports due to the ongoing economic and political crisis, especially after PM Hasina’s resignation. Initially, the company, in a statement, said that the electricity supply won’t be affected due to non-payment of dues. Around the same time, Reuters reported that the company has reduced power supply to the country by nearly 50 per cent from 1,400 MW to around 700-800 MW.
Due to the financial crunch faced by the Group in importing coal required to produce electricity, it gave the Bangladesh government a deadline for repayment of debt. The deadline was till November 7, but followed by a five-day negotiation, it was withdrawn. Last month, the Bangladesh government said that it had paid $96 million to Adani Group.
“Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million,” Muhammad Fouzal Kabir Khan told Reuters. Khan is the power and energy adviser in the interim Bangladesh government.