Adani Power is in the news because Bangladesh owes the company $844 million (about ₹7,000 crore) for power supply. Bangladesh has now asked Adani to cut back on electricity because fewer people are using power during the winter season. A representative from Adani Power explained that they can still provide electricity as needed according to their agreement with the Bangladesh Power Development Board (BPDB).
Adani Power signed a 25-year deal with BPDB back in 2015, supplying about 1,600 MW of electricity. This makes up about 10% of Bangladesh’s electricity needs. Although BPDB paid $91 million in October and $103 million in November, the total amount owed still stands at $844 million. The November bill has not been sent out yet.
Bangladesh is struggling to make enough money in dollars to pay for the electricity and fuel it imports. On November 7, BPDB issued a new letter of credit worth $173 million to ensure Adani can keep supplying electricity. This came after Adani Power had to cut supplies by half due to unpaid bills. They also asked for an extra $15-20 million to resume full supplies.
Adani Power’s spokesperson assured that they are following BPDB’s instructions and currently supplying from only one power unit. The spokesperson also mentioned that there haven’t been any talks about changing the power purchase agreement with Bangladesh. In September, Gautam Adani, the chairman of Adani Group, reached out to a top advisor in Bangladesh to push for quicker payment of the unpaid amount. Adani Power had invested $2 billion to set up the plant and related infrastructure, completing it in just 3.5 years, despite challenges during the COVID-19 pandemic.
(Disclaimer: The views and opinions expressed are solely those of the experts and do not reflect the views of NiftyStat.)
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