Adani Power Cuts Bangladesh Power Supply Over $846 Million Unpaid Bills Adani Power’s recent decision to halve its electricity supply to Bangladesh has exacerbated the country’s ongoing economic difficulties, raising alarms about energy security and financial stability. The cut, which was implemented by Adani Power Jharkhand Limited (APJL) due to unpaid debts totaling $846 million, has led to a power shortfall exceeding 1,600 megawatts (MW), with the 1,496 MW Adani plant now producing only 700 MW.

Bangladesh is already facing significant financial pressures stemming from inflation, currency devaluation, and a foreign exchange crisis, all of which are adversely affecting daily life and overall economic stability. This power supply reduction comes at a particularly challenging time, as the nation contends with rising energy demands fueled by rapid urbanization and industrial growth.

Heavily reliant on imported energy, Bangladesh’s financial situation has been strained by soaring global energy prices, making these imports increasingly expensive and depleting its foreign currency reserves. The reduction in power supply from Adani Power has further deepened the country’s power deficit, resulting in blackouts that disrupt industries, businesses, and households.

Although the Bangladesh Power Development Board (PDB) has been attempting to address its outstanding dues, escalating costs have made it difficult. Adani Power has reverted to its original coal pricing mechanism as outlined in its Power Purchase Agreement (PPA) with the PDB, following the expiration of a temporary price reduction. This pricing is linked to the rising costs of coal in the Indonesian and Australian Newcastle indices, contributing to higher energy expenses for the PDB.

The ongoing dollar shortage has compounded the PDB’s struggles to meet its financial obligations. While the Bangladesh Krishi Bank had planned to issue a $170.03 million letter of credit to Adani Power, it has been unable to do so due to a scarcity of dollars. Inadequate weekly payments from the PDB in light of Adani’s increased charges have led to escalating dues, forcing the power company to curtail its production.

This dollar scarcity also impacts Bangladesh’s ability to secure essential imports, including fuel and food, which, along with dwindling foreign reserves, is driving inflation and making basic necessities more costly. The cut in power supply from Adani Power adds yet another dimension to these economic challenges, underscoring the complex relationship between Bangladesh’s energy demands and its financial health.

Adani Power Cuts Bangladesh Power Supply Over $846 Million Unpaid Bills Adani Power, part of the Adani Group led by Indian billionaire Gautam Adani, has significantly reduced its electricity supply to Bangladesh by 50% due to unpaid bills. Bangladesh owes Adani Power Jharkhand Limited (APJL), a wholly-owned subsidiary of Adani Power, a total of $846 million. The Bangladesh Power Development Board (PDB) has failed to provide a letter of credit (LC) for $170.03 million from the Bangladesh Krishi Bank or settle the outstanding debts.

This reduction in power supply, reported by The Daily Star, began on Thursday night and has resulted in a power shortfall exceeding 1,600 megawatts (MW), with the Adani plant now generating only 700 MW from its 1,496 MW capacity.

Previously, Adani Power had requested that the PDB clear its debts by October 30, warning that failure to do so would lead to a suspension of power supply on October 31. Since July, the PDB has been paying around $18 million weekly, but Adani’s charges have exceeded $22 million, causing the outstanding dues to rise. Although the PDB had cleared some past dues, it has struggled to meet the increased costs due to a dollar shortage, which has hindered the opening of letters of credit for payments.

In a previous agreement, Adani Power had temporarily charged lower coal prices compared to other coal-fired plants. However, after this supplementary deal expired, Adani reverted to pricing based on a Power Purchase Agreement (PPA) that ties coal prices to the Indonesian and Australian Newcastle coal indices, further increasing costs.

Adani Power has indicated that it retains the right to recover capacity payments during the suspension of supply, as outlined in the PPA. The company has been urging the interim government of Bangladesh, established following the ousting of former Prime Minister Sheikh Hasina, to address the outstanding payments. Gautam Adani has also reached out directly to the interim Chief Adviser, Professor Muhammad Yunus, regarding the situation.