Adani Power Jharkhand Limited has reduced its electricity supply to Bangladesh by half, citing unpaid bills as the reason. On Thursday night, Bangladesh reported a power shortfall of over 1,600 MW after the Adani power plant decreased its supply to approximately 700 MW.
Adani Issues Payment Deadline to Bangladesh
In a letter dated October 27, Adani Power Jharkhand Limited (APJL) urged the Bangladesh Power Development Board (PDB) to settle outstanding payments by October 30. The letter warned that failure to pay could lead to further suspension of power under the Power Purchase Agreement (PPA). The outstanding balance included $846 million in unpaid bills and an additional $170.03 million that PDB had yet to secure through a letter of credit (LC) from Bangladesh Krishi Bank.
Payment Discrepancies and Rising Costs
A PDB official explained that payments to Adani have been made regularly, with weekly contributions of around $18 million. However, since July, Adani has been charging more than previous months, causing the unpaid balance to rise again. A dollar shortage at Krishi Bank prevented it from opening an LC for last week’s payment.
Coal Price Adjustments Lead to Higher Charges
PDB had previously negotiated a one-year supplementary deal with Adani in 2022 to keep coal prices lower than those charged by other plants. Once the deal ended, Adani reverted to the original PPA terms, which calculate coal prices based on the Indonesian and Australian coal price indices, leading to increased costs.
Adani Warns of Consequences for Non-Payment
Adani’s letter highlighted the difficulties in managing working capital due to PDB’s overdue payments and the lack of an LC. The letter added that, during any suspension of power supply, Adani would still seek to recover capacity payments under the terms of the PPA.
Amid ongoing disputes, Adani Group chairman Gautam Adani has also reached out to Bangladesh’s interim government for resolution.
