Adani Power, which supplies electricity to Dhaka from its 1,600-megawatt (MW) Godda facility located in Jharkhand, India, set this deadline due to difficulties in importing coal essential for power generation, as reported by sources.
"Last month, we settled $96 million, and this month, a letter of credit has been issued for an additional $170 million," stated Muhammad Fouzul Kabir Khan, the power and energy adviser to the interim government of Bangladesh, in an interview with Reuters.
Adani Power Jharkhand Limited (APJL), a fully-owned subsidiary of Adani Power, has halted half of its electricity supply to Bangladesh due to unpaid bills totaling $846 million, according to local media reports.
Data from Power Grid Bangladesh PLC indicated that the Adani plant reduced its output on the night of October 31. The 1,496-megawatt facility is currently generating approximately 700MW from a single unit, which is affecting the national power production. Bangladesh experienced a shortfall exceeding 1,600MW that night, as reported by The Daily Star.
Previously, the company had urged the Bangladesh power secretary to instruct the Bangladesh Power Development Board (PDB) to settle its outstanding payments by October 30.
In a letter dated October 27, the company warned that failure to pay the bills would compel it to take corrective measures under the Power Purchase Agreement (PPA) by suspending power supply on October 31.
APJL noted that the PDB has not provided a letter of credit (LC) for $170.03 million from Bangladesh Krishi Bank nor settled the outstanding amount of $846 million.
Following the expiration of a one-year supplementary agreement, Adani has resumed charging according to the terms of the PPA, the report stated.
Coal prices, as stipulated in the Power Purchase Agreement (PPA), are determined by the average values of two coal indices: the Indonesian coal index and the Australian Newcastle index, which contributes to an increase in pricing.
Adani has asserted that during the supply suspension period, the company retains the right to recover capacity payments as outlined in Section 13.2(1) of the PPA. The company has been urging the interim government of Bangladesh, led by Nobel Laureate Professor Muhammad Yunus, to settle outstanding payments since their assumption of power following the removal of former Prime Minister Sheikh Hasina. Gautam Adani, the chairman of Adani Group, has also communicated with Chief Adviser Yunus regarding the resolution of these dues.