Adani Power, which is part of the Adani Group, led by Indian billionaire Gautam Adani, said that the PDB has neither provided a letter of credit (LC) for an amount of USD 170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.
In a major move which could result in drastic electricity woes in Bangladesh, billionaire Gautam Adani-led Adani Group has cut down 50 percent of its power supply to the neighbouring country due to outstanding bills. According to a media report, Bangladesh owes $846 million to Adani Power Jharkhand Limited (APJL), a wholly-owned subsidiary of Adani Power.
Citing data from the Power Grid Bangladesh PLC , a report by The Daily Star newspaper said Adani plant reduced supply on Thursday night, adding that Bangladesh reported a shortfall of more than 1,600 megawatts (MW) on the intervening night of Thursday and Friday as the 1,496 MW plant is now producing 700 MW from a single unit.
Earlier, Adani Power had written to the power secretary asking the Bangladesh Power Development Board (PDB) to clear its outstanding dues by October 30. In the letter, dated October 27, the Adani Group company had 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 October 31.
The company said that the PDB has neither provided a letter of credit (LC) for an amount of USD 170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.
Adani Power raised prices
The Daily Star report quoted 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.
The official said that 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.
About the additional payment, he said, when the PDB raised a question on the coal pricing in February last year, they signed a supplementary deal that obliged Adani to quote coal prices less than the rates charged by the other coal-fired power plants.
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.
‘Reserve right to recovery payments’
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. The company has been pressing the interim government to pay the dues since they 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 August 8. Gautam Adani, chairman of Adani Group, also wrote to Chief Adviser Yunus.
(With PTI inputs)