Bangladesh has sought to revise a power deal with Adani Power due to differences over coal prices.

The Bangladesh Power Development Board (BPDB) had in November 2017 signed a 25-year power purchase agreement (PPA) with the Adani group’s listed entity. It involved the company supplying 1,496 megawatts (MW) of electricity per annum to the country from a coal-based power plant in Jharkhand state of India.

However, BPDB has recently written to Adani Power seeking a revision of the agreement, according to a United News of Bangladesh (UNB) report. It said the deal imposes much higher tariffs on the country than what other private electricity providers are paid.

“We have sent a letter to the Adani Group following a request we received in relation to opening LCs (in India) to import the coal that will be used as fuel for the 1,600 MW plant in Jharkhand,” a BPDB official wrote, according to the Bangladesh-based news agency’s Feb. 1 report.

“In our view, the coal price they have quoted ($400/MT) is excessive—it should be less than $250/MT, which is what we are paying for the imported coal at our other thermal power plants,” the official said, according to UNB.

The Indian government has, meanwhile, distanced itself from the row.

More dent on the Adani group’s credibility

Adani’s Bangladesh problem has come amid its crisis sparked by Hinderburg Research’s allegations of fraud against it.

Since the US-based financial forensic analysis firm published its damaging report on the group on Jan. 24, listed entities of the conglomerate have lost up to $100 billion in stock market value. On Feb.1, Adani Enterprises abruptly abandoned its $2.5 billion share sale amid its stocks’ freefall.

A section of Bangladesh’s media has also now raised questions about the future of BPDB’s deal with Adani in the wake of the tumble the group’s stocks have taken.

The reverberations of Hindenburg’s report haven’t subsided yet.

S&P Dow Jones Indices yesterday said it would remove Adani Enterprises from its sustainability indices from Feb. 7. The National Stock Exchange of India, meanwhile, has placed the shares of Adani Enterprises, Adani Ports, and Ambuja Cements (Owned by the Adani group) on an additional surveillance measure (ASM).

ASM was introduced by the Securities and Exchanges Board of India in 2018 as a risk containment and surveillance measure to monitor highly volatile stocks.

Reuters also reported yesterday that the Reserve Bank of India has south details of retail banks’ exposure to the Adani group.