India’s Adani Power (Jharkhand) Ltd, a major supplier of electricity to Bangladesh, has significantly reduced its supply over an unpaid bill dispute amounting to USD $846 million.
“We reduced the electricity supply by 1,050MW at 3:00am on Wednesday midnight, with only 550MW now being supplied from one unit,” an official from Adani Power confirmed to The Just Energy News on condition of anonymity.
The official stated that only $10 million of the $846 million owed was paid on Thursday. He added, “We hope to increase the supply through mutual understanding.”
Meanwhile, Just Energy News reported that Adani Power has threatened to halt supply altogether as local plants, including the S Alam-sponsored 1,224MW Banskhali plant and the 1,320MW Bangladesh-India joint venture plant at Rampal, have also reduced production.
A letter from M.R. Krishna Rao, President of Adani Power (Jharkhand) Ltd’s Joint Coordination Committee, to the Power Division highlighted that the Bangladesh Power Development Board (BPDB) had failed to provide a required Letter of Credit (LC) for $170.03 million from Bangladesh Krishi Bank or settle the $846 million overdue amount as of 27 October 2024.
Rao stressed that this lack of compliance is a “material default” under their Power Purchase Agreement (PPA), hampering Adani’s ability to sustain supply.
“Due to significant overdue payments and the absence of an LC, we struggle to secure working capital for coal suppliers and Operations and Maintenance (O&M) contractors, as our lenders withdraw support,” he noted, warning that Adani may suspend supply on 31 October 2024 if defaults are not addressed.
Other local plants face similar financial strain. The 1,224MW Banskhali plant, managed by S Alam Group, is pressing BPDB to resolve Tk 2,000 crore in overdue payments. SS Power 1’s Managing Director, Tan Zhe ling, in a letter to BPDB on 2 October 2024, urged prompt settlement to enable the plant’s continued operation until the next coal shipment.
The Matarbari 1200MW coal-fired stopped production of electricity while a unit of Pyara goes to overhauling. Besides, one unit of the Rampal power plant also suspend production over shortage of coal supply.
