Adani Power halves electricity supply to Bangladesh due to $846 million in unpaid bills

A PDB spokesperson explained that while some past payments have been made, costs are rising rapidly.

Adani Power Jharkhand Limited (APJL), part of India’s Adani Power, has halved power supplies to Bangladesh due to unpaid bills totaling $846 million. This reduction in supply, The Daily Star reported, has led to a power shortage in Bangladesh, leaving the country short of more than 1,600 megawatts (MW) overnight, impacting power availability.

The 1,496 MW power plant in Jharkhand, India, currently produces only 700 MW from a single unit. The cut came into effect on Thursday evening after APJL repeatedly demanded payments from the Power Development Board of Bangladesh (PDB). In a recent letter sent on October 27, APJL called on PDB to clear outstanding bills by October 30, warning that if payments were not made, they would stop supplying power under the terms of their Power Purchase Agreement (PPA).

A PDB spokesperson explained that while some past payments have been made, costs are rising rapidly. Since July, Adani Power’s collections have risen to more than $22 million every week, but PDB has only been able to pay about $18 million weekly, causing the outstanding amount to continue to rise. Last week, the dollar shortage even prevented payment from going through Krishi Bank as it was unable to open the required letter of credit for Adani.

Adani’s accusations escalated after the expiration of a year-long agreement that kept coal prices low. Adani now calculates coal prices based on the original agreement, which uses coal costs from Indonesia and Australia, resulting in higher prices. Under the PPA, Adani Power can still demand certain payments even if supplies are reduced.

Adani Group Chairman Gautam Adani has also approached the interim government of Bangladesh, led by Nobel laureate Professor Muhammad Yunus, for help in paying dues. This situation has highlighted the importance of sound financial planning and cooperation under international energy agreements as Bangladesh is dependent on foreign powers to meet its energy needs.