Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has significantly reduced its electricity supply to Bangladesh, cutting it down to 700 megawatts (MW) amid outstanding dues totaling $846 million, according to a report from The Daily Star.
The reduction in supply, which occurred on Thursday night, has resulted in a power shortfall of over 1,600 MW in Bangladesh. The Adani plant, which has a capacity of 1,496 MW, is now operating on just one unit.
The situation arose after Adani Power sent a notice to the Bangladesh Power Development Board (PDB), demanding the payment of overdue bills by October 30. The letter, dated October 27, warned that failure to settle the debts would result in a suspension of power supply by October 31 in accordance with the Power Purchase Agreement (PPA).
An official from the PDB noted that although some earlier dues had been cleared, the charges from Adani have escalated to over $22 million per week since July. In contrast, the PDB has been making payments of about $18 million weekly, leading to a growing backlog of unpaid bills.
Compounding the issue, a recent payment intended for Krishi Bank was not processed due to a shortage of dollars, which hindered the bank's ability to open a letter of credit.
The increase in unpaid dues followed the end of a year-long supplementary agreement that had secured lower coal prices for Adani. The company has since returned to pricing based on the original PPA, which ties coal costs to indices from Indonesia and Australia, resulting in higher charges. According to Adani, they are entitled to capacity payments during any suspension of supply as stipulated by the PPA.
Gautam Adani, the chairman of Adani Group, has also reached out to Bangladesh's interim government, led by Nobel Laureate Muhammad Yunus, in a bid to resolve the outstanding payments.
