India’s Adani Group shut down one of its two power units in Jharkhand, cutting its cross-border electricity supply to Bangladesh by half due to unpaid bills, sources told The Financial Express on Thursday.
The shutdown by Adani Power Jharkhand Ltd (APJL) comes after Bangladesh’s interim government failed to meet a payment deadline. APJL’s power plant, dedicated to exporting electricity to Bangladesh, has a capacity of around 750 megawatts.
This shutdown marks the first time the company has halted supply over a payment issue, according to a senior official with Bangladesh’s Power Development Board (BPDB).
The company also warned it may suspend operations of its remaining 750 MW unit by Nov. 7 if payments are not cleared by next week, the BPDB official said. Prior to the shutdown, APJL was supplying about 1,016 MW of electricity to Bangladesh’s national grid as of Oct. 30, BPDB data shows.
APJL had earlier warned BPDB it would halt power supply starting Oct. 31 if overdue payments of $846 million were not settled by Oct. 30. The company also claimed BPDB failed to provide a letter of credit (LC) worth $170.03 million for power imports.
“BPDB has not provided the required LC nor settled the overdue amount,” APJL President Krishna Rao said in a recent letter to Bangladesh’s Power Division, calling the situation a “material default” under their power-purchase agreement (PPA).
He added that without these payments and LC, APJL is unable to secure necessary working capital for coal suppliers and operations.
APJL’s letter urged BPDB to address the issues by Oct. 30 to avoid a suspension of electricity supply and the implementation of capital-recovery measures under the PPA.
BPDB has struggled with payments to independent power producers, especially amid a dollar crunch that has restricted its ability to settle bills with APJL.
BPDB has been making nominal payments, falling short of covering the monthly bills owed to Adani Power.
Sources noted that APJL is the only foreign entity generating electricity for Bangladesh from an external plant, but the venture has faced controversy.
Since power supply began last year, BPDB has pushed for a revision of the 25-year PPA, signed in November 2017, which involves transmitting power through a dedicated 400kV transmission line to Bangladesh’s national grid. Transparency International Bangladesh has called for a reconsideration, and if necessary, cancellation of the agreement, given the accumulating issues.
Adani’s temporary shutdown adds further pressure on BPDB, already facing difficulties in settling dues with several oil-fired and coal-fired power plants across Bangladesh.
Follow us
