Adani cuts electricity supply to Bangladesh in half due to unpaid bills: Report

India’s Adani Power Jharkhand Limited (APJL), a wholly owned subsidiary of Adani Power, has stopped half of its electricity supply to Bangladesh due to unpaid bills of $846 million, local media reported on Friday.

Data from Power Grid Bangladesh PLC showed the Adani plant reduced its supply on Thursday night, The Daily Star newspaper said.

Bangladesh reported a deficit of more than 1,600 megawatts (MW) on the intervening Thursday and Friday night as the 1,496 MW plant was currently producing 700 MW from a single unit, the newspaper reported.

Earlier, Adani company wrote a letter to the energy minister, asking the Bangladesh Power Development Board (PDB) to clear its outstanding dues by October 30.

The letter dated October 27 stated that if the bills are not paid, the company will have to take remedial measures under the Power Purchase Agreement (PPA) by suspending electricity supply on October 31.

The company said PDB failed to provide a letter of credit (LC) of $170.03 million from Bangladesh Krishi Bank and failed to collect the outstanding amount of $846 million.

The newspaper quoted a PDB official as saying that they had previously paid some of the previous dues, but since July, Adani has been charging more than in previous months.

He said PDB was paying about $18 million a week, while the fee was more than $22 million.

“Therefore, the allowance payments increased again,” he said, adding that they also sent last week’s payment to Krishi Bank, but due to a dollar shortage, the bank could not open a letter of credit against the payment.

Regarding the additional payment, he said that when the PDB raised a question on coal pricing in February last year, they signed an additional agreement compelling Adani to offer coal prices lower than the rates set by other coal-fired power plants.

The report stated that after the one-year additional agreement period, Adani started charging in accordance with the PPA again.

According to the PPA, coal prices are calculated based on the average price of two coal indices (Indonesian coal index and Australian Newcastle index), which increases prices.

Adani said that during the period of supply suspension, the company reserves the right to recover capacity payments under Section 13.2(1) of the PPA.

Adani has been pressuring the interim government to pay dues since he took over following the ouster of then prime minister Sheikh Hasina.

On August 8, an interim government was established in Bangladesh under the leadership of Nobel laureate Professor Muhammad Yunus. Gautam Adani, chairman of Adani Group, also wrote a letter to Chief Advisor Yunus.