Adani Power has warned Bangladesh that it will switch off power supply to the country if there is no resolution on the payment of nearly $850 million in outstanding dues by Nov 7.
The company had previously set a deadline of Oct 31 for the Bangladesh Power Development Board (BPDB) to clear the dues and open a $170 million letter of credit (LC) to secure payments, according to a report by the Times of India.
The BPDB attempted to issue an LC through Krishi Bank, but this did not comply with the terms of the power purchase agreement, TOI reports.
The ongoing shortage of US dollars was cited as a significant reason behind the issue. In response, Adani’s Godda plant in Jharkhand slashed its supply starting Oct 31, exacerbating power shortages in Bangladesh.
The plant remains the largest power supplier to Bangladesh, followed by Payra (1,244 MW), Rampal (1,234 MW), and SS Power I (1,224 MW).
Other power plants, including the Rampal plant operated by NTPC’s joint venture Bangladesh-India Friendship Power Company in Bagerhat and SS Power I, were already operating at less than half capacity due to coal shortages, according to Power Grid Bangladesh’s (PGB) daily reports.
Several power units have limited fuel purchases as Bangladesh struggles to make timely payments, leading to an accumulation of dues, according to TOI.
While around $90 million was reportedly paid to Adani in October, earlier payments ranged from $20-50 million per month against monthly bills of $90-100 million. The electricity supplied from Adani’s Jharkhand plant costs Tk 10-12 per unit, with prices linked to coal rates in Indonesia and Australia.
Although Adani Power has not commented on the matter, senior executives expressed hope for a resolution, according to TOI.
However, the continued payment delays and lack of clarity have driven India’s largest private power producer to consider halting supply to settle creditor dues.
The potential stoppage could impact the Godda plant’s operations as Bangladesh is its sole buyer. With monthly billing amounting to $90-100 million, the annual revenue for the plant exceeds $1.1 billion
Following the recent political shift in Bangladesh after the fall of the Sheikh Hasina government, Adani has been exploring options to supply power to the Indian domestic market, where demand is growing and payments are assured, TOI reports.
The company has been advised to seek connection to the local grid, potentially through a sub-station in Bihar’s Lakhisarai.