Adani Power Jharkhand Limited (APJL), part of the Adani Group, has cut off half of its electricity supply to Bangladesh due to unpaid bills totaling $846 million, as reported by local media on Friday.
According to Power Grid Bangladesh PLC, the supply reduction started Thursday night, leading to a power shortfall of over 1,600 megawatts (MW). The 1,496 MW plant is now generating only 700 MW from a single unit.
Previously, Adani Power had sent a letter to Bangladesh’s power secretary, urging the Bangladesh Power Development Board (PDB) to settle the outstanding dues by October 30. The letter, dated October 27, warned that if the payments were not made, they would be forced to take action under the Power Purchase Agreement (PPA) and suspend power supply on October 31.
Adani Power noted that the PDB has not issued a letter of credit for $170.03 million, nor cleared the $846 million debt. A PDB official stated that they had made some payments on previous debts, but since July, Adani has been charging higher rates than before.
The PDB has been paying about $18 million weekly, while the charges from Adani exceed $22 million, causing the unpaid balance to grow again. Although the PDB submitted a recent payment, the Bangladesh Krishi Bank was unable to issue a letter of credit due to a shortage of dollars.
In response to questions about coal pricing from the PDB last February, Adani had agreed to a supplementary deal to charge lower rates. However, following the end of that deal, they reverted to their original pricing structure under the PPA, which is based on average coal prices from two indices: the Indonesian and Australian Newcastle indices.
Adani has stated that they will seek to recover capacity payments during the suspension of supply, as allowed by the PPA. The company has been urging Bangladesh’s interim government to pay its dues since it took office after the ousting of Prime Minister Sheikh Hasina. The interim government, led by Nobel Laureate Professor Muhammad Yunus, was established in Bangladesh on August 8, and Gautam Adani has also communicated directly with Chief Adviser Yunus.
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