Adani Power Stops Bangladesh’s Power Supply Due To Non-Payment Dues
Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has significantly reduced its electricity supply to Bangladesh due to outstanding dues totalling $846 million. This decision, reported on November 2, 2024, follows a letter from Adani Power demanding payment by October 30, warning that failure to do so would result in a suspension of power supply under the terms of their Power Purchase Agreement (PPA).
The power supply was cut by half, with the plant now generating approximately 700 megawatts (MW) from a capacity of 1,496 MW. This reduction has led to a reported power shortfall of over 1,600 MW in Bangladesh.
Despite some payments made previously, the Bangladesh Power Development Board (PDB) has struggled to keep up with rising charges from Adani, which have increased to over $22 million weekly, while PDB has been paying around $18 million. This discrepancy has contributed to the growing unpaid dues.
The increase in charges is partly attributed to the end of a one-year supplementary deal that had temporarily lowered coal prices. Adani has resumed pricing based on original agreements linked to international coal indices, which have driven costs higher.
The ongoing financial strain has hindered APJL's ability to manage working capital for coal suppliers and operational expenses, exacerbated by the lack of a letter of credit from Bangladesh Krishi Bank for an amount exceeding $170 million.
Gautam Adani, chairman of the Adani Group, has reached out to Bangladesh's interim government, led by Nobel Laureate Professor Muhammad Yunus, urging prompt resolution of the outstanding payments.
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