Adani Power has initiated international arbitration to resolve a dispute with Bangladesh over power supply payments, Reuters reported.
“There are disagreements in the way certain cost elements are calculated and billed. Hence, both partners have agreed to invoke the dispute resolution process and are confident of a quick, smooth and mutually beneficial resolution,” an Adani Group spokesperson told Reuters.
The dispute centers around payments for electricity supplied under a 2017 agreement between Adani Power and Bangladesh Power Development Board.
Adani Power operates a 1,600 MW coal-fired plant in Godda, eastern India, which supplies nearly 10% of Bangladesh’s electricity needs.
Bangladesh’s interim government had earlier accused Adani of breaching the power purchase agreement by withholding tax benefits granted to the Godda plant by India, Reuters reported in December.
The two sides have been locked in a dispute over how certain cost components under the power purchase agreement are calculated and billed.
Last week, Adani said its outstanding dues from Bangladesh had dropped sharply — to the equivalent of 15 days’ tariff — from around $900 million in May and nearly $2 billion earlier this year.
“Adani Power reaffirms its commitment to the PPA and will continue to support Bangladesh by supplying reliable, cost-competitive and high-quality power,” the company said.
Bangladesh’s de-facto power minister Muhammad Fouzul Kabir Khan confirmed that negotiations are ongoing. “Once that process is over, we will move toward international arbitration, if needed,” he told Reuters.
