Dark Days Ahead for Bangladesh? Adani Warns - 'Pay the Bill or We'll Cut Power Supply'

Adani Power has issued a warning to Bangladesh, saying it will cut off all its electricity supply if the debt owed of about $850 million isn't paid by 7 November. Bangladesh is already facing a critical power crisis, and this will be severely adverse to the economy of the country. The company had written to BPDB for settlement of all dues till October 31 and issuance of a $170 million LC, which BPDB tried to procure from an agricultural bank violating the requirement of the power purchase agreement. According to reports, this problem is mainly caused due to Bangladesh's dollar shortage. It is equally disturbing to both Adani and Bangladesh.

Adani Threatens Bangladesh Power Cut Over $850M Dues

Adani Power has already cut off electricity supply to Bangladesh from its Jharkhand unit following late payments since October 31, which further raised the power shortage. As reported by Power Grid Bangladesh (PGB), "Adani's Godda plant supplied only 724 MW although its capacity is 1,496 MW.". Other plants like Rampal and SS Power have already been running on low loads as the shortages of coal were not being relieved. This can add instability in Bangladesh's economy already plagued by energy shortage.

Adani Power decides to cut its supply as payment is delayed and there is uncertainty in the transaction with Bangladesh. Cutting supply completely may jeopardize Godda plant's viability as Bangladesh happens to be its solitary customer. In monthly billing, it hovers around $90-100 million. Annual revenue generated from the plant is well over $1.1 billion.

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The changes newly developed by the Government of Bangladesh are also viewed upon by Adani Power at various options of selling home power. For example, through a substation at Lakhisarai district of Bihar, thereby bringing it into contact locally with the grid. Thereby, a new business opportunity will open up before Adani Power, as well as resolve the on-going crisis.