The Adani Group has warned Bangladesh of a full power cut if outstanding dues aren’t cleared by November 7, 2024. Adani Power Jharkhand Limited, a subsidiary of Adani Power, has already halved its supply to Bangladesh, citing a debt of around $850 million owed by the Bangladesh Power Development Board (BPDB).
The reduction in supply from Adani’s Godda power plant in Jharkhand is significant, as it is a key energy source for Bangladesh, which is already dealing with power shortages. The plant, capable of producing 1,496 MW, currently supplies only about 700 MW, intensifying Bangladesh’s energy challenges.
Earlier, Adani set a deadline for payment by October 31 and requested a $170 million letter of credit as payment security, which Bangladesh has struggled to fulfil due to dollar shortages. Despite BPDB’s attempts to arrange a payment guarantee through Krishi Bank, the proposed terms reportedly did not align with the power purchase agreement.
As a result, Adani Power Jharkhand Limited (APJL) cut down electricity supply to Bangladesh by more than 50% starting from 31st October. Before cutting down the electricity supply to Bangladesh, APJL asked the Power Development Board (PDB) of Bangladesh to clear outstanding payments by Wednesday (30th October). A letter sent by the company said, “PDB has neither provided LC (Letter of Credit) for an amount of $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.”
On Friday, Adani Power supplied 724 megawatts (MW) of power to Bangladesh. This has caused a major power crisis in Bangladesh, as generation in power plants in Bangladesh has also come down due to fuel shortage. Now, if the company does not receive the pending dues, it will completely stop supplying power to Bangladesh.
Adani Power is in the process of connecting with the domestic grid, to supply power from the plant to neighbouring states after it stops supplying to Bangladesh.
The interim govt in Bangladesh is struggling with payments due to shortage of dollars. The government has been exploring ways to meet the financial obligations, including the possibility of issuing government bonds to fund these payments.
