Adani generates revenue worth Tk10bn last year by selling electricity to Bangladesh

Adani Group, a prominent Indian multinational conglomerate, generated Tk 10 billion in revenue through the sale of electricity to Bangladesh last year.

Adani commenced the sale of electricity to Bangladesh in April last year. Bangladesh consistently imports 1,496 MW of electricity from Adani's power plant located in Godda area of Jharkhand, India.

Adani Power generated significant growth with a nearly 37 percent increase in revenue and a 94 percent surge in profit at the end of the fiscal year 2023-24, according to a financial report of the company.

Adani Power's revenue surged to Rs 50,960 crore, equivalent to Tk 67, 23 crore, during India's fiscal year 2023-24. Of the total, the company generated Rs 7,370 crore equivalent to Tk around 9,700 crore from Godda center in Jharkhand which is 14.46 percent of the total income. Adani Power's revenue for the financial year 2022-23 was Rs 37,268 crore or Tk 49,150 crore.

Adani Power's income has increased to Rs 13,692 crore or Tk 18,880 crore in the outgoing fiscal year. Adani generated more than half of the increased profit from Bangladesh.

The income from all the power plants increased in the fourth quarter of the financial year. The power plants are Mundra, Godda, Udupi and Mahan.

The company’s profit increased due to rising electricity demand in India and falling prices of imported coal and alternative fuels for the power plants, according to the report.

The company earned the profit due to the higher income and lower production cost. Besides, electricity sales to merchant customers and Godda's operating profit have played a major role in increasing profits in the last quarter, said the report.

Meanwhile, Adani Power's profit in the last fiscal year almost doubled to Rs 20,829 crore or Tk 27,394 crore. In the previous financial year 2022-23, the profit of the company was Rs. 10, 727 crore. In addition, Adani Power made a profit of Rs. 4,912 crore in the financial year 2021-22 and Rs.1, 270 in 2020-21.

However, Adani Power incurred loss in the previous two years. The company incurred loss Rs. 2,275 crore in 2019-20 and Rs. 984 crore in the fiscal year 2018-19, according to the report.

Analysing the financial report, it can be seen that in the first quarter from April-June of the last financial year, Adani sold electricity to Bangladesh worth Rs. 1,468 crore, in the second quarter from July-September, Rs. 1, 824 crore and in the fourth quarter from January-March Rs. 2, 144 crore.

That means the most electricity was purchased during January-March. However, the demand for electricity during winter was comparatively lower than in the peak season.

The first unit of the Godda plant started production on April 5 last year and the second unit on June 26 to sell electricity to Bangladesh. Power will be sold from the plant for a long period (25 years) under a contract signed with the Bangladesh Power Development Board (BPDB).

When the agreement was signed with Adani, the power generation capacity of Bangladesh was 12, 922 MW and the maximum production was 9,507 MW.

However, when Adani’s power was added, the power generation capacity in the country increased to 23, 332 MW and the maximum production was 14, 800 MW.

Mainly to meet the growing demand for electricity and to supply electricity to the northern part of the country, Bangladesh took a side towards neighboring India. Although there have been many controversies about this agreement from the beginning.

Meanwhile, keeping its own plants idle, Bangladesh is importing electricity from Adani by setting up its own plant. Because, according to the terms and conditions of the contract with Adani, if the electricity is purchased less than a certain part of the capacity of the Godda plant, Bangladesh will have to pay a penalty.

Besides, the centre has to pay high capacity charges. In one year from April last year to March of the current year, Adani received capacity charges of around $37.75 billion or Tk4,100 crore.

The company's EBITDA (earnings before interest, tax, depreciation, and amortization) surged by 126 percent to Rs 5,273 crore in the last quarter compared to the corresponding period of the previous year. It stood at Rs 2,329 crore in the last quarter of the preceding financial year.

Adani sold 159.80 crore units of electricity (KW) to Bangladesh in the three months following its commencement of commercial operations on April 4 last year. The purchase cost per unit of electricity was Tk14.02 in Bangladeshi. However, in the current financial year, the BPDB anticipates that this cost may decrease to Tk13 per unit.