Bangladesh fast tracks payment to Adani Power after supply halved over mounting dues: Report

Bangladesh is accelerating payment of more than $800 million it owes Adani Power ahead of a November 7 deadline set by the Indian company, which has cut electricity exports to Bangladesh by more than half, Reuters reported. 

Adani Power, which exports power to Dhaka from its 1,600-megawatt (MW) Godda plant in eastern India’s Jharkhand state, set the deadline for receipt of dues as it faces challenges in importing coal necessary for power generation, The report added citing sources. 

“Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million,” Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government, told Reuters. 

Adani Power Jharkhand Limited (APJL), a wholly-owned subsidiary of Adani Power, has stopped half of its power supply to Bangladesh due to outstanding bills of $846 million, as per reports in the local media.   

Data from Power Grid Bangladesh PLC showed the Adani plant reduced supply on October 31 night. The 1,496-megawatt-plant is now producing around 700MW from a single unit, impacting the national production. Bangladesh reported a shortfall of more than 1,600MW last night, The Daily Star newspaper reported.  

The company had earlier requested Bangladesh power secretary to direct the Bangladesh Power Development Board (PDB) to clear its outstanding dues by October 30.   

The company in a letter, dated October 27, said that if the bills are not paid, it shall be constrained to take remedial action under the Power Purchase Agreement (PPA) by suspending the power supply on October 31.   

APJL said that the PDB has neither provided a letter of credit (LC) for an amount of $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.   

After the tenure of the one-year supplementary deal, Adani has again started charging as per the PPA, the report said.   

According to the PPA, coal prices are calculated based on the average price of two coal indices -- the Indonesian coal index and the Australian Newcastle index -- which increases the prices.  

Adani said that during the period of suspension of supply, the company reserves its right to recover capacity payments under Section 13.2(1) of the PPA. Adani has been pressing the Bangladesh interim government led by Nobel Laureate Professor Muhammad Yunus to clear dues since they took charge after the ouster of then prime minister Sheikh Hasina. Gautam Adani, chairman of Adani Group, had also wrote to Chief Adviser Yunus about clearing the dues.