AsiaElec: India’s Adani Power halves electricity supply to Bangladesh citing unpaid bills

India’s Adani Power has halved its electricity supply to Bangladesh, citing unpaid bills, as reported by The Daily Star on November 2. Bangladesh experienced a shortfall of over 1,600 MW on the night of October 31 following the reduction in supply from Adani’s 1,496 MW power plant, which is currently generating around 700 MW from a single operational unit.

Adani Power Jharkhand Limited (APJL), a unit of Adani Power, had previously written to Bangladesh’s power secretary, urging the Bangladesh Power Development Board (BPDB) to clear overdue bills by October 30. Adani began supplying electricity to Bangladesh last year from its thermal power plant in Godda, Jharkhand – the group’s first international project and India’s first transnational power initiative, with all electricity intended for export. The plant’s first unit became operational in April 2023, followed by a second unit in June.

Under the 25-year power purchase agreement signed in November 2017, Adani is contracted to supply 1,496 MW to Bangladesh via a 400-kV transmission line connected to Bangladesh’s grid.

In August, The Economic Times reported that Bangladesh owes over $1bn to five Indian power firms, with Adani alone due about $800mn. A BPDB official told The Daily Star that while a portion of dues was paid previously, charges have increased since July this year, resulting in rising arrears. The BPDB has reportedly been paying around $18mn weekly, short of the required $22mn, contributing to the accumulating debt. The official noted that a recent payment submitted to Krishi Bank could not be processed due to a dollar shortage.

In recent developments, Bangladesh’s interim government, led by Muhammad Yunus, plans to scrutinise Indian businesses, including the Adani Group, as reported by The Indian Express in September. Despite concerns over pricing, Bangladesh is expected to uphold its power purchase agreement with Adani Power, according to Reuters, due to supply constraints and limited chances of a successful legal challenge.

Recently, the Indian government amended its power export rules, allowing Adani Power’s Godda plant to supply the domestic market in the event of payment delays or sustained underutilisation. An internal memo from the Indian power ministry, dated August 12, stated that power generators supplying neighbouring countries may connect to the Indian grid if payment issues or underutilisation arise, according to a Reuters report.

Bangladesh is currently experiencing economic challenges exacerbated by ongoing political instability, which led to the removal of the previous administration. The government is also seeking budgetary support from Japan and is in talks with other international agencies for financial assistance.

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