Author: PPD Team Date: 04/11/2024
Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has halved its power supply to Bangladesh, citing outstanding dues of $846 million, according to local media.
Data from Power Grid Bangladesh PLC shows that supply from the 1,496 MW plant has been reduced to 700 MW from a single unit, exacerbating Bangladesh’s energy shortfall, which exceeded 1,600 MW overnight.
On October 27, Adani warned the Bangladesh Power Development Board (PDB) of potential supply cuts unless payments were made by October 30. The company requested that a $170.03 million letter of credit be provided via Bangladesh Krishi Bank, in addition to clearing the full outstanding amount.
Despite PDB’s weekly payments of about $18 million, recent price adjustments by Adani have increased costs to over $22 million per week, leading to an accumulating backlog.
The cost escalation follows the expiration of a supplementary agreement that had kept coal prices lower. Adani now uses a coal pricing formula under the Power Purchase Agreement (PPA), based on Indonesian and Australian coal indices, further straining Bangladesh’s finances amid dollar shortages.
Adani has approached Bangladesh’s interim government to resolve the payment issues, while maintaining its right to recover capacity payments during the supply suspension under the terms of the PPA.