Adani Power Jharkhand Limited cuts power supply to Bangladesh by half over outstanding bills
By Shweta Kumari | First Published Nov 1, 2024, 2:02 PM ISTIndia's Adani Power Jharkhand Limited (APJL) halved its cross-border electricity supply to Bangladesh in a hitch over payment backlog.
India’s Adani Power Jharkhand Limited (APJL) has reduced its electricity supply to Bangladesh, citing unpaid bills as the cause of the disruption. Power Grid Bangladesh PLC data shows that the power giant curtailed its output on Thursday night, leaving the 1,496-megawatt plant running at roughly half its capacity. This cut, now supplying only 700 MW, has intensified Bangladesh’s energy shortfall, which exceeded 1,600 MW last night.
In a letter dated October 27, Adani urged Bangladesh’s Power Development Board (PDB) to clear the arrears by October 30 or face further cutbacks. “Otherwise, APJL shall be constrained to take remedial action under the Power Purchase Agreement (PPA) by suspending power supply on October 31,” Adani stated in the letter addressed to the power secretary, reported the Daily Star.
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“As you [secretary] are aware, the deadline is approaching shortly and till date, PDB has neither provided LC for an amount of $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.”
The PDB, while acknowledging partial payments, argued that Adani’s recent charges have surged beyond previous months. “We have been paying approximately $18 million weekly, while the current charges exceed $22 million,” explained a PDB official to The Daily Star.
He added that despite last week’s payment submission, Bangladesh Krishi Bank was unable to issue a letter of credit due to a dollar shortage.
The official also referenced a past agreement over coal pricing, pointing out that Adani had, under a supplementary deal, committed to charging lower coal rates than other plants.
However, with the deal’s one-year term ending, Adani has reverted to the original PPA terms, which calculate coal prices based on the Indonesian coal index and Australian Newcastle index—significantly increasing costs.
The letter further disclosed Adani’s pressing need for payments, “We reiterate that non-submission of LCs and non-payment of outstanding amount within due date are the material defaults of PDB under the PPA, which has adversely affected the performance of APJL to supply power to PDB.”
The letter further underscored that without PDB’s payments and letters of credit, Adani has faced “tremendous difficulties” in securing working capital. The company has struggled to pay coal suppliers and maintain operations, with lenders withdrawing their support amid mounting dues.
This standoff has already seen Adani extend the suspension deadline from October 20 to October 30 following an assurance from the PDB that the Bangladesh Krishi Bank would issue the necessary credit line. During this suspension, Adani asserted its right to seek compensation as outlined in Section 13.2(1) of the PPA.
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