Adani Power Reduces Electricity Supply to Bangladesh Due to Unpaid Debts: Report
Adani Power Jharkhand Limited (APJL), a subsidiary of the Adani Group, has significantly cut its electricity supply to Bangladesh, reducing output from its 1,496 megawatt (MW) plant to just 700 MW. This reduction follows a failure to pay outstanding dues amounting to USD 846 million, as reported by The Daily Star.
Adani Power Jharkhand Limited (APJL), a subsidiary of the Adani Group, has significantly cut its electricity supply to Bangladesh, reducing output from its 1,496 megawatt (MW) plant to just 700 MW. This reduction follows a failure to pay outstanding dues amounting to USD 846 million, as reported by The Daily Star.
The decision to halve the power supply took effect on Thursday night, leading to a substantial power shortfall of over 1,600 MW across Bangladesh. According to data from Power Grid Bangladesh PLC, this cut has left the country grappling with electricity shortages.
Adani Power had previously communicated with the Bangladesh Power Development Board (PDB) regarding the outstanding payments, requesting that the dues be cleared by October 30. A letter sent on October 27 explicitly warned that failure to settle the unpaid bills would result in a suspension of power supply by October 31, as stipulated in their Power Purchase Agreement (PPA).
A PDB official indicated that while some previous dues had been cleared, the ongoing situation has been exacerbated by a recent increase in charges from Adani, which have escalated to over USD 22 million weekly. In contrast, PDB has only been able to pay around USD 18 million, leading to a growing debt.
Additionally, last week’s payment attempt to Krishi Bank was thwarted by a shortage of dollars, preventing the bank from opening a letter of credit necessary for processing the payment.
The price increase followed the end of a one-year supplementary deal that had mandated lower coal prices. Adani has now reverted to pricing based on the original PPA, which ties coal costs to Indonesian and Australian indices, thereby increasing expenses.
In a bid to resolve the issue, Gautam Adani, chairman of the Adani Group, has also reached out to Bangladesh’s interim government, led by Nobel Laureate Professor Muhammad Yunus, urging them to address the outstanding dues to restore the power supply to its previous levels.
The situation underscores the growing tension between Adani Power and Bangladesh amid rising costs and the financial pressures faced by the PDB. As negotiations continue, the impact on Bangladesh’s energy supply and overall economic stability remains a pressing concern.
Sources By Agencies
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