Adani Power Jharkhand Limited (APJL), a company owned by India’s Adani Power, has cut back on half of its electricity supply to Bangladesh. This decision is due to an outstanding payment of $846 million that Bangladesh owes for the power it has received.
According to information from Power Grid Bangladesh PLC, the electricity supply from Adani’s power plant was reduced on Thursday night, as reported by The Daily Star, a local Bangladeshi newspaper. The reduction has created a shortage in Bangladesh’s power supply.
On the night between Thursday and Friday, Bangladesh reported a power shortage of more than 1,600 megawatts (MW). The Adani power plant in Jharkhand, which normally has the capacity to supply 1,496 MW, is now producing only 700 MW from one of its two units. This significant drop has led to difficulties in meeting the country’s energy needs.
Adani Power Cuts Supply to Bangladesh
Adani Power Jharkhand Limited (APJL), a part of Adani Power, has reduced its electricity supply to Bangladesh by half due to unpaid bills totaling $846 million, The Daily Star reported on Friday.
Power Grid Bangladesh PLC’s data indicates that the Adani plant decreased its supply on Thursday night, resulting in a power shortage of over 1,600 megawatts (MW) across Bangladesh overnight. Currently, the 1,496 MW plant is producing only 700 MW from one unit, rather than its full capacity.
Previously, Adani Power had sent a letter to the Bangladesh Power Development Board (PDB), requesting the payment of the outstanding amount by October 30. The letter, dated October 27, cautioned that if the payment was not cleared, Adani would stop the power supply by October 31, as specified under their Power Purchase Agreement (PPA).
Also Check: Diwali Bank Holidays 2024
Why Bangladesh Had Unpaid Dues?
A Bangladesh Power Development Board (PDB) official explained that while some previous payments were cleared, unpaid dues have grown since July. This increase is due to Adani’s weekly charges rising to over $22 million, while PDB has only been paying around $18 million, resulting in an accumulating debt.
The official also mentioned that last week’s payment could not be processed due to a shortage of U.S. dollars, which prevented Krishi Bank from issuing a letter of credit.
The price increase follows the end of a one-year supplemental agreement, which had temporarily required Adani to offer coal at a lower price. With the agreement concluded, Adani has returned to the original terms of the Power Purchase Agreement (PPA), where coal costs are calculated based on international indices from Indonesia and Australia, making prices higher.
Adani Power stated that, under PPA terms, they are allowed to claim “capacity payments” even if power supply is interrupted. Additionally, Adani Group Chairman Gautam Adani has reached out to Bangladesh’s interim government, led by Nobel Laureate Professor Muhammad Yunus, to discuss the unpaid dues and seek resolution.
Also Check: Reliance and Disney Merger Approved
FAQs
Q.1. Why did Adani Power cut its electricity supply to Bangladesh?
Ans. Adani Power reduced supply due to unpaid dues of $846 million from Bangladesh. Rising costs and delayed payments have contributed to the growing debt.
Q.2. How much power is Adani currently supplying to Bangladesh?
Ans. Adani Power’s Jharkhand plant, normally supplying 1,496 MW, is now only generating 700 MW due to the unpaid dues.
Q.3. Why are there unpaid dues between Adani Power and Bangladesh?
Ans. Adani’s weekly charges rose to over $22 million in July, while Bangladesh’s payments remained around $18 million, causing unpaid dues to increase.
Q.4. What caused the price increase in Adani’s charges?
Ans. The price hike follows the end of a one-year agreement on lower coal prices, after which Adani returned to the original pricing terms based on international coal indices.
Q.5. Has Adani Power sought assistance from Bangladesh’s government?
Ans. Yes, Gautam Adani has reached out to Bangladesh’s interim government, led by Professor Muhammad Yunus, to address and resolve the unpaid dues.
