Bangladesh seeks new terms for Adani coal electricity deal: Washington Post report

Bangladesh is seeking a discount on electricity purchased from Adani Power, the power company owned by Indian businessman Gautam Adani, said a report by Washington Post citing a stock exchange filing that was made public on 7 February.

"In a Feb. 3 letter sent to the Securities and Exchange Board of India and published by stock exchanges on Tuesday, Adani Power told the Indian regulator that Bangladesh was 'requesting us to consider a discount' on the lucrative power deal, which was signed in 2017 but remained shrouded in secrecy for years," said the report.

"Under the terms of the confidential 163-page power purchase agreement, which was obtained and reported on by The Washington Post in December, Bangladesh, a poor and heavily indebted country, would pay high prices for electricity from a new coal-fired power plant built by Adani, a longtime ally of Indian Prime Minister Narendra Modi, that exceeded prices paid to comparable power plants," it added.

According to the Washington Post report, the "unusual terms included the absence of a price ceiling on coal, meaning that Adani – who is likely to import coal for the power plant from his own overseas coal mines via his own shipping network and coal-handling ports – could charge Bangladesh an even steeper price".

The agreement between Adani Group and Dhaka for purchasing energy was signed following a 2015 state visit by Indian Prime Minister Narendra Modi to Bangladesh, where "the Indian leader urged his counterpart, Sheikh Hasina, to facilitate the entry of Indian businesses into Bangladesh," the WP said.

Citing an investigation from last year by The Post, the report said "the Adani power project received extensive tax breaks and legislative changes pushed through by officials under the Modi government that would effectively save the billionaire's firm more than $1 billion".

Citing local media reports, the Washington Post further said: "In recent weeks, Bangladeshi officials have expressed unease about the deal with Adani and have hoped for a renegotiated term.

"But in its letter to Indian regulators this week, Adani Power said the power purchase agreement is not being renegotiated. Varsha Chainani, an Adani spokeswoman, declined further comment. A spokesman for Nasrul Hamid, the Bangladeshi minister for power, did not respond to a request for comment."

The report also adds that in its letter to Indian regulators, Adani Power said, "The power purchase agreement is not being renegotiated."

US investment research firm Hindenburg Research published a report on 24 January, alleging extensive fraud by Adani Group. The Indian conglomerate, which has enjoyed years of meteoric growth, came under growing scrutiny in international business circles as well as in India following the report. For weeks, Adani's seven publicly traded companies have suffered a steep stock rout – losing more than $100 billion in market capitalisation.

Adani has rebutted the allegations and said the criticism by foreign investors amounted to an attack on India itself.