In a significant development, Adani Power, led by Gautam Adani, has slashed electricity supply to Bangladesh by 60 percent, citing non-payment of dues totaling over $800 million (approximately Rs 6,750 crore). According to data from Bangladesh’s grid operator, reported by Reuters, Adani Power has reduced the power supply to around 520 MW as it seeks to recover the outstanding balance.
Earlier this month, Adani Power, which supplies power to Dhaka from its dedicated 1,600 MW Godda plant in Jharkhand, had already reduced supply to 700 MW-750 MW, down from approximately 1,400-1,500 MW in early August. The supply was further cut to around 520 MW late on Thursday, based on data from Power Grid Bangladesh and an official from the Bangladesh Power Development Board (BPDB), as reported by Reuters.
‘Won’t be Held Hostage’
Muhammad Fauzul Kabir Khan, the power and energy adviser in Bangladesh’s caretaker government led by Nobel laureate Mohammad Yunus, stated that Bangladesh is gradually paying off the outstanding dues to Adani Power. He stressed that the country “won’t let any power producer hold us hostage.”
“We are making the payments gradually and will explore alternative options if anyone ceases supply. We will not allow any power producer to hold us hostage,” Khan was quoted as saying by Reuters.
A BPDB official mentioned that despite Bangladesh expediting its payments and lifting a payment deadline set by Adani for November 7, the country continues to receive reduced supply. Bangladesh reportedly opened a letter of credit for $170 million for Adani and accelerated payments, yet power supply cuts continued.
Adani Power’s Price Hikes
According to The Daily Star, a Bangladeshi news outlet, a BPDB official disclosed that Adani Power began charging more since July, even though previous dues were partially settled. While BPDB has been paying approximately $18 million weekly, the current charge has increased to over $22 million, leading to the buildup of dues again. The official added that last week’s payment was submitted to Krishi Bank, but due to a dollar shortage, the bank was unable to open a letter of credit.
Regarding the additional charges, the official explained that after BPDB questioned coal pricing last year, they signed a supplementary agreement with Adani that required coal prices to be set below rates charged by other coal-fired plants. However, after the one-year term of this agreement expired, Adani reverted to pricing as per the Power Purchase Agreement (PPA).
As outlined in the PPA, coal prices are calculated based on an average of two indices: the Indonesian coal index and the Australian Newcastle index, which has resulted in higher prices, according to the report.
