Adani Power Jharkhand Limited (APJL), part of India’s Adani Power, has reduced its electricity supply to Bangladesh by half because of unpaid bills totalling $846 million. This cut in supply, reported by The Daily Star, has led to a power shortage in Bangladesh, leaving the country short by over 1,600 megawatts (MW) overnight, which has affected electricity availability.
The 1,496 MW power plant in Jharkhand, India, is now supplying only 700 MW from a single unit. This reduction came into effect on Thursday night after APJL repeatedly requested payments from Bangladesh’s Power Development Board (PDB). In a recent letter sent on October 27, APJL urged the PDB to clear the outstanding bills by October 30, warning that if payments weren’t made, they would stop power supply under their Power Purchase Agreement (PPA) terms.
A PDB official explained that while some past payments had been made, the costs have been rising quickly. Since July, Adani Power’s charges have gone up to over $22 million each week, but PDB has only been able to pay around $18 million weekly, causing the unpaid amount to grow further. Last week, a dollar shortage even prevented a payment through Krishi Bank as it couldn’t open a necessary letter of credit for Adani.
Adani’s charges increased after a one-year deal that kept coal prices lower expired. Now, Adani is calculating coal prices based on the original agreement, which uses coal costs from Indonesia and Australia, resulting in higher prices. Under the PPA, Adani Power can still claim certain payments even when supply is reduced.
Adani Group’s chairman, Gautam Adani, has also approached Bangladesh’s interim government, led by Nobel Laureate Professor Muhammad Yunus, asking for help in settling the dues. This situation has highlighted the importance of reliable financial planning and cooperation in international energy agreements, as Bangladesh depends on foreign power to meet its energy needs.
