Bangladesh’s interim government is planning to examine the terms under which Indian businesses, including the Adani Group, operate there, The Indian Express reported on Thursday, citing an unidentified senior functionary.
The Adani Group exports electricity to Bangladesh from its unit in Jharkhand’s Godda district under an agreement signed in 2017.
The Bangladeshi senior functionary said that the Muhammad Yunus-led interim government will look into the contracts as “one cannot have a foreign company not follow the law of the land”.
The senior functionary told The Indian Express that although the Bangladesh government’s actions could be interpreted as targeting Indian businesses, that was not the intention. “They will be scrutinised for what they are doing here, how much is Bangladesh paying, is it justified, all these questions will come up,” the official said.
The statement comes two days after the Financial Times reported that the Adani Group had warned the Bangladeshi government that its overdue payments – amounting to more than $500 million, or over Rs 4,198.7 crore – had become unsustainable.
Commenting on reports that the Bangladesh government was planning to scrutinise the operations of Indian businesses, an Adani Power spokesperson said that the company had no knowledge about Dhaka reviewing the 2017 agreement.
“In the spirit of true partnership, we continue to supply power to them despite the massive outstanding owed to us,” the spokesperson was quoted as saying by The Indian Express. “We are in constant engagement with the Bangladesh authorities and have requested them for early liquidation of our dues as it is making our operations unsustainable.”
Adani Group’s power exports to Bangladesh
The agreement between the Adani Group and the Bangladesh government was signed when the Awami League government headed by former Prime Minister Sheikh Hasina was in power in Dhaka. As part of the agreement, the plant in Jharkhand’s Godda supplies 7% to 10% of Bangladesh’s base load, or the minimum amount of electricity needed to meet a particular region’s demand.
The memorandum of understanding between the Adani Group and Dhaka was signed in August 2015, shortly after Prime Minister Narendra Modi visited Bangladesh.
Opposition parties in India have questioned whether Modi was directly involved in the deal between the Adani Group and the Bangladesh government.
In Bangladesh too, Adani Power’s electricity exports have long been at the centre of controversy, with experts contending that it entails Dhaka buying power at exorbitantly high prices.
Last year, the Bangladesh Power Development Board wrote to the company seeking that the agreement be revised. While there was no official statement on the revisions sought, an unidentified official had told Bangladeshi news agency UNB that the high prices were the point of contention.
On August 12, the Indian government amended guidelines on generators that supply power exclusively to a neighbouring country. Adani Power’s plant in Godda was the only one that had a contractual obligation to supply all the electricity it generates to Bangladesh.
The amended guidelines mean that Adani Power can sell electricity contracted to Bangladesh within India in certain situations. The move is expected to help safeguard the company against possible disruptions caused by the political crisis in Bangladesh.
The Indian government amended the guidelines on electricity exports nearly a week after Hasina resigned as Bangladesh’s prime minister and fled to India amid protests seeking her ouster. Yunus took over as the head of the interim government on August 8.
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