Adani willing to review coal pricing if dues settled
The message was conveyed during a virtual meeting held on Monday (23 June) between senior officials of the Bangladesh Power Development Board (BPDB) and representatives of Adani Power, according to government officials familiar with the matter
Highlights:
- Adani demands payment before reviewing disputed coal pricing formula
- Bangladesh disputes $900M dues; estimates lower, citing pricing flaws
- Adani offers to waive $50M penalty if paid quickly
- Coal pricing inflates costs; Payra plant much cheaper per unit
- Sourcing coal from Australia criticized for raising freight costs
- Adani warns of power disruption if dues not cleared soon
India's Adani Power has told Bangladesh authorities that it is willing to review the contentious coal pricing formula tied to its electricity exports — but only after Bangladesh clears its outstanding dues.
The message was conveyed during a virtual meeting held on Monday (23 June) between senior officials of the Bangladesh Power Development Board (BPDB) and representatives of Adani Power, according to government officials familiar with the matter.
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"We have an outstanding payment issue with Adani, and there is some progress on that front," Power Division Secretary Farzana Mamtaz told TBS. "Adani claims $900 million is due, while our internal estimate is lower. This gap has created a dispute between us."
She acknowledged that a portion of the claimed amount includes late payment penalties, which are still under discussion. "We are working to resolve this and hope to clear Adani's dues within a month. Once that is done, we expect to see further progress," she added.
BPDB Chairman Md Rezaul Karim said the discussions with Adani covered a broad range of issues, including both payment and the coal pricing mechanism used in the power supply agreement.
"We are sourcing funds from different channels to pay Adani. Hopefully, we will be able to make a substantial payment by this week," he said.
The BPDB chairman noted that Bangladesh has formally raised concerns over the pricing formula used by Adani, which has come under scrutiny for inflating power generation costs.
"Adani has assured us that our concerns will be reviewed by their senior officials. We will continue our engagement to find a resolution," he said.
Bangladesh currently imports 1,600MW of electricity from Adani's coal-fired plant in Jharkhand under a long-term power purchase agreement. The pricing structure of the coal used in that plant has faced criticism for being overly reliant on volatile international benchmarks and higher freight charges, particularly as Adani sources coal from distant suppliers like Australia instead of closer markets.
An internal review by the interim government has flagged the pricing formula as skewed in favour of Adani, contributing to inflated power costs compared to other coal-based plants such as Payra.
"Adani has expressed willingness to sit with us on the pricing formula," a senior Power Division official told TBS. "They have also said they would waive a $50 million late penalty if the BPDB clears the dues quickly."
But that is easier said than done. According to the BPDB, as of May 2025, the unpaid bills stand at $700 million. Adani, however, claims the amount is $900 million, citing a higher coal price basis for the gap.
The difference is largely due to the pricing formula, which critics say heavily favours the Indian conglomerate. For example, in FY2023-24, Adani's average per-unit cost was Tk14.87, significantly higher than the Tk11.83 from the Payra power plant, a similar coal-fired facility in Patuakhali.
A technical committee formed by the interim government has already flagged the pricing terms in Adani's deal as flawed. The agreement pegs coal prices to specific global indexes, but Adani reportedly deviates from these benchmarks and fails to apply available discounts.
In addition, the company sources coal from distant locations such as Australia, raising freight costs unnecessarily. Experts say sourcing from closer suppliers like China could substantially lower the delivered cost.
"Using volatile international indexes for long-term power deals makes the tariff unpredictable and risky," said one BPDB official.
Despite earlier promises of low-cost power, Adani's electricity has turned out to be among the most expensive in Bangladesh's energy mix. Officials now say they are under growing pressure to resolve the issue before it snowballs into a diplomatic or legal standoff.
Adani writes to finance adviser over dues, warns of supply disruption
On 17 June, Adani wrote to Finance Adviser Salehuddin Ahmed, pressing for immediate settlement of "$900 million in dues". A resolution, however, remains uncertain as Dhaka weighs its options under a caretaker government with limited authority for large-scale renegotiations.
In the letter, signed by Anil Sardana, MD of Adani Energy Solutions Ltd (AESL) and Adani Power Ltd (APL), the company stated that due to the large payment backlog, it is becoming increasingly challenging to continue operations at its Godda power plant.
If a significant portion of the dues is not cleared within June, the plant may not be able to maintain uninterrupted power generation from the following month, potentially disrupting power supply to Bangladesh, it said.
Adani said BPDB's delayed and inadequate payments have strained its finances, forcing it to take high-interest loans for fuel and parts, while lenders threaten to pull capital support.
Sources said BPDB pays $90-100 million per month to ensure uninterrupted electricity supply. This foreign currency is provided by Bangladesh Bank, and the payments to Adani are made through Bangladesh Krishi Bank (BKB).
