Power Supply Agreement Between Bangladesh and Adani Power in the Wake of Political Turmoil
Following the resignation of Bangladesh Prime Minister Sheikh Hasina, concerns have arisen regarding the future of the power supply agreement between Bangladesh and Adani Power Limited. This agreement, signed in 2017, involves Adani Power supplying 1,496 MW of power to Bangladesh for 25 years.
However, the agreement has faced criticism due to the high cost of power provided by Adani Power. In February 2023, Bangladesh authorities requested a revision of the agreement, citing "excessive" coal pricing.
With a new government likely to take over, the potential impact on the agreement remains uncertain. Experts believe that a complete cancellation of the PPA is unlikely, given Bangladesh's dire need for power and the high cost of alternative energy sources like LNG. However, a renegotiation of terms is a possibility.
Adani Power has maintained its commitment to supplying power to Bangladesh, emphasizing its adherence to the PPA and the positive impact of the agreement on Bangladesh's power situation.
Observers are closely monitoring the situation, waiting to see how the new government will approach the agreement and how it will balance public sentiment with economic realities. The trajectory of the project will depend on the new government's stance and its relationship with previous projects.
In the meantime, Adani Power continues to supply power to Bangladesh, with monthly billing averaging around $90 million. The company expects this inflow to remain consistent, as initial procedural hurdles have been overcome.