News Brief
Adani Subsidiary Slashes Power Supply To Bangladesh Over $846 Million In Outstanding Bills: Report
Nobel laureate and head of Interim Government in Bangladesh Muhammad Yunus (X)
Adani Power Jharkhand Limited (APJL), a fully owned subsidiary of Adani Power, has halted 50 per cent of its electricity supply to Bangladesh due to unpaid bills totalling $846 million.
Bangladesh reported a shortfall of more than 1,600 megawatt on Thursday night after the 1,496 MW Adani plant reduced supply.
Data from Power Grid Bangladesh PLC showed the Adani plant reduced supply to around 700 MW on Thursday night, The Daily Star newspaper said.
Earlier, the Adani group company wrote to the power secretary, asking the Bangladesh Power Development Board (PDB) to pay the bills by 30 October.
The letter, dated 27 October, said that if the bills are not paid, the company shall be constrained to take remedial action under the Power Purchase Agreement (PPA) by suspending the power supply on 31 October.
APJL said that the PDB has neither provided a letter of credit (LC) for an amount of $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.
The newspaper quoted a PDB official as saying that they had earlier cleared a portion of previous dues, but since July, Adani has been charging more than the previous months.
He said the PDB has been paying around $18 million weekly, while the charge is more than $22 million.
“This is why the due payments increased again,” he said, adding that they had submitted last week’s payment to Krishi Bank as well, but due to a dollar shortage, the bank failed to open a letter of credit against the payment.
After the tenure of the one-year supplementary deal, Adani has again started charging as per the PPA, the report said.
According to the PPA, coal prices are calculated based on the average price of two coal indices — the Indonesian coal index and the Australian Newcastle index — which increases the prices.
Adani said that during the period of suspension of supply, the company reserves its right to recover capacity payments under Section 13.2(1) of the PPA.
In the letter, the Adani group company said that it revised the deadline for the suspension of power supply to 30 October from 20 October in response to a PDB letter on 17 October, which confirmed that the Krishi Bank agreed to issue LC within 10 business days.
"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," it said.
The letter added that the company is facing "difficulties in managing working capital for making payment to coal suppliers and operations and maintenance contractors on account of huge outstanding payments from the PDB and the non-availability of LC, as well as our Lenders having withdrawn the working capital support".
Adani Group has been urging the Muhammad Yunus-led interim government to pay the dues since it took charge after the ouster of then prime minister Sheikh Hasina.
An interim government led by Nobel Laureate Professor Muhammad Yunus was installed in Bangladesh on 8 August.
