Adani Power cuts Bangladesh’s electricity supply in half due to $846 million unpaid bills

Adani Power Jharkhand Limited (APJL), part of Adani Power in India, has halved its electricity supply to Bangladesh due to unpaid bills totaling $846 million. This disruption in supply led to a power outage in Bangladesh, leaving the country with a deficit of more than 1,600 megawatts (MW) overnight, affecting the availability of electricity, The Daily Star reported.

The 1,496 MW power plant in Jharkhand, India, currently provides only 700 MW of energy from a single unit. This reduction came into effect on Thursday night after APJL repeatedly requested payment from the Bangladesh Power Development Board (PDB). In a recent letter sent on October 27, APJL called on PDB to pay the outstanding bills by October 30, warning that if payments were not made, they would stop power supply as per the terms of the Power Purchase Agreement (PPA).

A PDB official explained that although some payments had been made in the past, costs were increasing rapidly. Since July, Adani Power’s charges have risen to over $22 million every week, but PDB has only been able to pay around $18 million weekly, causing the unpaid amount to rise even further. Last week, Krishi Bank, which was unable to open the required letter of credit for Adani, even prevented payment due to the dollar shortage.

Adani’s wages rose after the end of a one-year deal that kept coal prices low. Adani now calculates coal prices based on the original agreement using coal costs from Indonesia and Australia, causing prices to rise. Under the PPA, Adani Power can demand certain payments even if supply decreases.

Gautam Adani, chairman of Adani Group, also appealed to Bangladesh’s interim government led by Nobel Prize-winning Professor Muhammad Yunus and asked for help in paying dues. This situation has revealed the importance of reliable financial planning and cooperation in international energy agreements, as Bangladesh is dependent on external power to meet its energy needs.