Adani halves power supply to Bangladesh over unpaid tablets: report

India’s Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has stopped half of its electricity supplies to Bangladesh due to outstanding bills worth US$846 million, according to a local media report on Friday.

Data from Power Grid Bangladesh PLC showed that the Adani power plant cut power supplies on Thursday evening, the Daily Star newspaper reported.

Bangladesh reported a shortage of more than 1,600 megawatts (MW) in the interim night between Thursday and Friday as the 1,496 MW power plant now produces 700 MW from a single unit, the newspaper reported.

Adani had earlier written to the Energy Minister asking the Power Development Board of Bangladesh (PDB) to clear its outstanding debts by October 30.

The letter dated October 27 states that if the bills are not paid, the company will be forced to take remedial action under the Power Purchase Agreement (PPA) by suspending power supply on October 31.

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

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

According to him, PDB pays out about US$18 million weekly and the collections amount to more than US$22 million.

“That is why the due payments have increased again,” he said, adding that they also submitted the payment last week to Krishi Bank, but due to shortage of dollars, the bank was unable to issue a letter of credit against the payment.

On the additional charges, he said when PDB raised the issue of coal prices in February last year, they signed a side agreement that obliged Adani to quote coal prices lower than the rates charged by other coal-fired power plants.

After the one-year add-on agreement expired, Adani began charging fees again under the PPA, it said.

Under the PPA, coal prices are calculated based on the average price of two coal indices—the Indonesian Coal Index and the Australian Newcastle Index—which drives up prices.

Adani said that during the period of supply suspension, the company reserves the right to collect capacity charges in accordance with section 13.2(1) of the PPA.

Adani has been demanding the caretaker government pay its dues since it took over after the ouster of then Prime Minister Sheikh Hasina.

On August 8, an interim government was established in Bangladesh led by Nobel Prize winner Professor Muhammad Yunus. Gautam Adani, Chairman of the Adani Group, also wrote to General Counsel Yunus.