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Bangladesh seeks new terms for Adani coal electricity deal

A woman walks past the Adani Electricity corporate office building in Mumbai on Monday. (Francis Mascarenhas/Reuters)
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Bangladeshi officials are seeking a discount on electricity purchased from the power company owned by Gautam Adani, according to a stock exchange filing that was made public on Tuesday, in the latest sign of mounting scrutiny of the Indian billionaire’s dealings.

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.

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.

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Furthermore, 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 Post reported.

The power purchase agreement between Adani and Bangladesh was signed following a 2015 state visit by Modi to Bangladesh, where the Indian leader urged his counterpart, Sheikh Hasina, to facilitate the entry of Indian businesses into Bangladesh.

In recent weeks, Bangladeshi officials have expressed unease about the deal with Adani and have hoped for a renegotiated terms, according to local media reports. 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.

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Adani, who enjoyed years of meteoric growth, has come under growing scrutiny in international business circles as well as in India. For weeks, Adani’s seven publicly traded companies have suffered a steep stock rout — losing more than $100 billion in market capitalization — after the U.S. investment research firm Hindenburg Research published a Jan. 24 report alleging extensive fraud.

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

The investigation last year by The Post found that 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.