Bangladesh, Adani hold talks after warning of possible power supply suspension

Following a recent warning from Adani Power regarding a possible halt in electricity supply over unpaid dues, discussions are now underway between the Bangladesh Power Development Board (BPDB) and the Indian energy company’s officials.

The authorities at the Adani power plant in Godda, Jharkhand, India, which supplies 1,600 megawatts of electricity to Bangladesh, recently said they halt its supply if outstanding payments were not settled in time.

They wrote to the Bangladesh Power Development Board (BPDB) urging them to resolve these defaults by Wednesday. If not resolved, they said they would take measures to stop the supply from Thursday, according to the letter.

Currently, Adani supplies 1,100MW of electricity during off-peak hours.

Krishna Rao, a representative of Adani Power (Jharkhand) Ltd and head of the joint coordination committee, mentioned in a letter that the BPDB had not provided the necessary letter of credit (LC) for $170.03 million from Bangladesh Krishi Bank, nor had they settled $846 million (Tk10,086 crore) in dues.

He said the failure to provide LC and settle dues on time had caused a “material default” under the power purchase agreement, which impeded Adani Power's ability to continue the supply.

“Due to unpaid dues and the lack of LC, we cannot secure working capital for coal suppliers and operations and maintenance contractors, and our lenders are also withdrawing support.”

Rao added that despite ongoing discussions, Adani representatives faced difficulties resolving issues related to outstanding bills and disputes over additional coal charges for the Jharkhand plant.

Meanwhile, BPDB sources said other coal-based power plants had already reduced supply due to a lack of coal, and load-shedding would increase if Adani's supply stopped. 

However, they also noted that there was a supply capacity of around 11,000MW from gas-based power plants. If the gas supply remains adequate, the issue may be mitigated, according to them.

BPDB Member Kh Mokammel Hossain told Dhaka Tribune that funds had been deposited in the bank to pay Adani’s outstanding bills, but the payment could not be made due to a shortage of dollars.

Notably, Adani built the 1,600MW power plant in Godda to supply electricity to Bangladesh. The BPDB had signed a power purchase agreement with Adani in 2017 to buy electricity, under which the former is supposed to purchase power from the latter’s plant for 25 years.

Adani has been supplying electricity commercially since April last year.

https://www.dhakatribune.com/363738