Adani Power Ltd is seeking fresh concessions from New Delhi for its $2 billion coal-fired plant in eastern India, which is currently struggling with a payments backlog from Bangladesh, the lone buyer of its electricity, reports Bloomberg.
In August, India’s power ministry allowed Adani to sell electricity from the plant into India, but its location in a designated special economic zone, or SEZ, is hampering those domestic sales, people familiar with the matter said.
Unless the trade ministry grants an exemption, they said, the power produced would be considered imported — and subject to a tax.
The company is also asking to keep a waiver on customs duty applied to the imported coal that it uses to fire the 1.6-gigawatt facility, said the people, who sought anonymity because the discussions are not public.
Without these concessions, selling the power to India’s price-sensitive consumers becomes effectively impossible.
Adani Power did not respond to an emailed request for comment.
The plant, which accounts for about a 10th of Bangladesh’s power consumption, has already racked up as much as $790 million of dues as of the end of September, Adani executives said on an analyst call in October.
However, some payments from Bangladesh have begun to come through.
“We hope that there will be no further deterioration in terms of the outstandings,” said Nishit Dave, the company’s head of investor relations.
“…and, as of now, we don’t think that we need to look at that option, but if required, we can consider it,” he said on the call regarding whether Adani plans to link the plant to the Indian grid.
“We will explore options,” he added.
The payments owed by Bangladesh have accumulated amid efforts to review the power-purchase agreement signed under Dhaka’s previous government, ousted earlier this year following accusations of widespread corruption.
Trouble at the plant adds to ongoing headaches for the Adani Group, whose top officials were indicted by US prosecutors last month over an alleged bribery scheme worth more than $250 million.
Adani has denied the US allegations and said it would seek legal recourse to defend itself.
Other companies have already flagged the risk with India’s SEZ regulation.
In 2020, when India began finalising the import taxes on solar cells and modules, more than 60 percent of its locally produced modules came from these export promotion zones.
After the government said it would levy a 40 percent import tax on panels and 25 percent on cells, local firms said this would make their modules costlier in the domestic market and lobbied the government for relief.
Since then, some producers have built capacity in areas outside these clusters.
Daily Star
