Political upheaval in Bangladesh raises concerns over Adani Power's transnational supply project

In November 2017, Adani Power signed a 25-year power purchase agreement (PPA) with the Bangladesh Power Development Board to supply 1,496 megawatts (MW) from its Godda plant in Jharkhand.

The Godda power project, commissioned in June 2023, is India's first transnational power project, supplying 100 percent of its generated power to another nation, and has been providing power to Bangladesh since its commissioning.

"Adani Power has a PPA with Bangladesh's power distribution utility, Bangladesh Power Development Board (BPDB), to meet their country's power requirements," a spokesperson for Adani Power was quoted as saying by Moneycontrol.

"In its normal course of business, BPDB is scheduling the power supply to meet their nation's demand, and as per that schedule, Adani Power continues to supply power to the Bangladesh power utility without any disruption," the spokesperson added.

Adani Power stated that it will comply with the Bangladesh Power Development Board's (BPDB) schedule and adhere to the terms outlined in the PPA between the two utilities.

During an investor call on May 2, following Adani Power's March quarter earnings, Shailesh Sawa, the group's head of regulatory engagement, mentioned that the outstanding dues from the Bangladesh utility were close to $400 million, approximately four months' worth of payments, the report said.

Sawa also noted that the monthly billing for the Bangladesh power contract averages around $90 million, with payments made in dollars.

In its earnings call for the June quarter on July 31, Adani Power management noted that the company has started receiving timely payments over the past few months, as all processes are now well established.

"On average, four to five months of arrears is there for all the power suppliers of Bangladesh," the management noted.

The Godda plant is a dedicated power station to Bangladesh, and it is not even connected to the Indian grid, the management added.

As the Godda power project supplies the entire power to Bangladesh, a change in stance by the new administration could push the project into trouble owing to the outstanding dues and debt obligations incurred to set up the plant.

As of June 30, Adani Power's net debt narrowed to Rs 25,653 crore from Rs 26,545 crore on March 31. Further, the finance cost for the quarter ended June 30 fell to Rs 811 crore from Rs 883 crore in the same quarter the previous year.