Adani’s Revenue Surges with Bangladesh’s Power Purchase

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Bangladesh’s electricity purchase from Adani Power significantly contributed to the substantial profit earned by the Indian conglomerate during the initial nine months of the 2023-24 fiscal year.

In November 2017, Bangladesh agreed with Adani Power Jharkhand, a wholly-owned subsidiary of the multinational company headquartered in Ahmedabad, to import electricity. This move garnered criticism from analysts who speculated that the deal would favor the Indian company more.

During April-December of the 2023-24 fiscal year, Adani Power witnessed a remarkable 40 percent increase in its continuing revenue, reaching 37,173 crore rupees (Tk 48,911 crore). Notably, the Jharkhand unit contributed 5,326 crore rupees, constituting 14.3 percent of the total revenue.

Consequently, Adani Power recorded a staggering 230 percent year-on-year surge in profits, amounting to 18,092 crore rupees (Tk 23,805 crore) during the nine months.

Bangladesh opted for electricity imports from its neighboring country to meet its escalating demand for power and efficiently supply electricity to the northern region, which lacks substantial power infrastructure.

At the time of the deal with Adani, Bangladesh’s power generation capacity stood at 12,922 MW, with the highest generation capacity at 9,507 MW, as reported by the Bangladesh Power Development Board’s website.

Situated on 425 hectares of land in the Godda district of the Indian state of Jharkhand, the power plant commenced commercial operations in the first quarter of India’s fiscal year beginning in April.

During the recent earnings call, Shailesh Sawa, the then-chief financial officer of Adani Power, highlighted the company’s sales growth in the third quarter. This growth encompassed the operating and financial performance of the additional capacity of 1,496 megawatts from the Godda power plant.

Adani Power’s continuing revenue surged by 72 percent year-on-year to 13,405 crore rupees in the October-December quarter. Profit soared to 2,738 crore rupees from 9 crore rupees during the period, as disclosed by the company.

The surge in net profits was attributed to revenue escalation and reduced finance and fuel costs. The company underscored that revenue growth was propelled by higher operating capacity post the commissioning of the Godda plant and increased power demand, coupled with lower imported fuel prices.

The inclusion of the Godda power plant contributed 1,824 crore rupees to Adani Power’s revenue in the third quarter.

Moreover, the company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) witnessed a 242 percent year-on-year increase to 5,059 crore rupees in the quarter, indicating efficient management of day-to-day operations.

The electricity from the Godda plant to Bangladesh is transmitted through a dedicated 106km transmission line up to the Indian border. Commercial operations commenced on April 4 of the previous year, generating 159.8 crore units of electricity (kilowatt-hour) in the subsequent three months till June 30, with a per-unit cost of Tk 14.02.