Adani seeks fresh lifeline for power plant supplying Bangladesh
Adani Power Ltd is seeking new concessions from the Indian government for its $2 billion coal-based power plant in eastern India. This facility is facing financial strain due to delayed payments from Bangladesh, which is its sole electricity buyer, according to Bloomberg.
In August, India’s power ministry authorized Adani to sell electricity from the plant within India. However, this move is complicated by the plant’s location in a special economic zone (SEZ), sources familiar with the situation revealed. Under current regulations, electricity produced in SEZs for domestic use is treated as imported, making it subject to taxation unless an exemption is granted by the trade ministry.
Additionally, Adani is lobbying to retain a customs duty waiver on the imported coal used to fuel the 1.6-gigawatt plant, the sources stated, speaking on condition of anonymity since the negotiations are not public.
Without these measures, selling power to Indian consumers—who are highly price-sensitive—becomes unfeasible, the sources added.
The power plant, which supplies approximately 10% of Bangladesh’s electricity, had accumulated unpaid bills amounting to $790 million as of September, according to statements by Adani executives during an October analyst call. Despite this backlog, some payments from Bangladesh have started to trickle in.
“We hope there won’t be any further worsening of the outstanding payments,” said Nishit Dave, Adani’s head of investor relations. On the possibility of connecting the plant to India’s power grid, Dave mentioned, “At present, we don’t see the need for this option, but if necessary, we will consider it. We are open to exploring alternatives.”
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