Adani Power Halts Bangladesh Supply Over $846 Million Dues
Adani Power Jharkhand Limited (APJL), a subsidiary of India’s Adani Power, has suspended half of its power supply to Bangladesh, citing unpaid dues amounting to USD 846 million.
The action has led to a significant reduction in Bangladesh’s power supply, creating a shortfall of more than 1,600 megawatts (MW). According to Power Grid Bangladesh PLC data, Adani’s 1,496 MW plant is currently generating only 700 MW from a single operational unit, as reported by The Daily Star.
Payment Dispute and Demand for Clearance
In a letter dated October 27, Adani Power urged Bangladesh’s Power Development Board (PDB) to clear outstanding bills by October 30. The letter warned that failure to settle the dues would lead to suspension of power supply, in accordance with the Power Purchase Agreement (PPA), effective October 31. The letter also highlighted that PDB has yet to provide a letter of credit (LC) for USD 170.03 million from Bangladesh Krishi Bank, alongside the pending payment of USD 846 million.
Rising Costs and Discrepancies in Payments
PDB officials have stated that while they have been clearing some past dues, the cost of power from Adani has increased since July. They disclosed that PDB has been paying approximately USD 18 million weekly, although the current charge has risen to more than USD 22 million, contributing to a renewed backlog in payments. Compounding this issue, Bangladesh Krishi Bank cited a shortage of US dollars, impacting their ability to open an LC for recent payments.
The dispute extends to coal pricing, with Adani resuming charges as per the PPA following the expiration of a one-year supplementary deal. Under this agreement, Adani had previously provided coal at a reduced rate, but the current PPA terms link coal pricing to the average rates on the Indonesian and Australian Newcastle indices, leading to higher costs for Bangladesh.
As the power shortfall continues to impact Bangladesh, the future of power stability in the region remains uncertain unless the outstanding financial issues are resolved between the parties.
