Adani Power cuts half of Bangladesh electricity supply over $846 million unpaid dues

The power reduction comes at a challenging time for Bangladesh, which reported a shortfall of over 1,600 megawatts (MW) overnight. The 1,496 MW Adani plant is currently generating just 700 MW from one of its two units.

In Short

• Adani said Bangladesh hasn't cleared $846 million in dues
• Asked country to clear dues by October 30 in letter dated October 27
• Letter warned that if bills went unpaid, power supply would be suspended

Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has cut its power supply to Bangladesh by half due to outstanding dues amounting to $846 million, according to local media sources. Power Grid Bangladesh PLC data revealed that the plant reduced its supply on Thursday night, as reported by The Daily Star.

The power reduction comes at a challenging time for Bangladesh, which reported a shortfall of over 1,600 megawatts (MW) overnight. The 1,496 MW Adani plant is currently generating just 700 MW from one of its two units.

Adani had previously warned the Bangladesh Power Development Board (PDB) about this measure, sending a letter on October 27 requesting that dues be cleared by October 30. The letter stated that without payment, the company would have to suspend supply as per the Power Purchase Agreement (PPA) beginning October 31.

The letter highlighted that the PDB has neither provided the required $170.03 million letter of credit through Bangladesh Krishi Bank nor settled the larger outstanding amount.

A PDB official disclosed that while the board had cleared portions of previous dues, a recent price adjustment by Adani has driven up costs since July. The PDB has been making weekly payments of around $18 million, although Adani’s charges now exceed $22 million per week, leading to a backlog.

A supplementary deal, initially signed to regulate coal pricing, had kept rates lower until its expiration. Since then, Adani has reverted to calculating coal prices as per the PPA, which includes a mix of the Indonesian and Australian Newcastle coal indices. This shift has further raised costs for the PDB amid dollar shortages and financial strain.

In recent months, Adani has appealed to Bangladesh’s interim government for payment resolution. The company maintains the right to recover capacity payments during the suspension of supply, in line with Section 13.2(1) of the PPA.

With inputs from PTI