Adani owes $464 million: Notice to stop power supply from November 11

Staff Correspondent

India’s Adani Power has issued a final warning to the Bangladesh Power Development Board (PDB). The company has said that if the outstanding amount is not paid by November 10 of this month, the electricity supply to Bangladesh will be stopped from November 11. Meanwhile, the Yunus government is trying to gain sympathy from anti-India people by raising baseless allegations against the company instead of paying the bill.

In a letter sent to the PDB chairman on October 31, Adani Power Vice Chairman Avinash Anurag wrote that despite repeated requests for payment of dues for a long time, PDB has not yet paid $496 million. Of this, $262 million has been accepted by PDB itself as ‘undisputed dues’.
Adani’s letter said that as per clause 13.2 of the Power Purchase Agreement (PPA) signed on November 5, 2017, the company has the right to suspend supply if the dues are not paid. The letter clearly states, ‘If the dues are not settled by November 10, we will be forced to stop supply from November 11.’

The company also said that even if the supply is cut, they are entitled to a ‘capacity charge’ as per the contract – meaning that even if the plant is shut down, PDB will have to pay a certain amount based on the production capacity.
Earlier, last year, Adani Power had threatened to cut off supply to collect dues. Then, partial power supply was reduced for a few days.

Meanwhile, PDB sources said that the matter is now under the purview of the National Committee for Review of Power Purchase Agreements. The committee, headed by Justice Mainul Islam, was formed after the formation of the government of Chief Advisor Professor Dr. Muhammad Yunus. The committee, in its initial report published on November 2, identified ‘administrative failures and irregularities’ in the approval process of the Adani agreement. Which experts see as a lame argument.

Adani Power has also urged PDB to renew its letter of credit (LC). The LC issued through Bangladesh Krishi Bank as per the 2017 agreement expired on October 30. The company has also warned that delay in renewing the LC as per the agreement could be considered a ‘breach of contract’.

Earlier on September 27, Adani Group Chairman Gautam Adani, in a letter to Chief Advisor Dr. Muhammad Yunus, said that Bangladesh had paid some of the money but still owed about $464 million. He warned that if the arrears were not paid quickly, their operations and international financing would be put under pressure.

Electricity supplied from Adani Group’s Godda coal-fired power plant in Bangladesh has been connected to the national grid since April 2023. However, the commercial relationship between the two countries is now believed to be facing a new impasse over the price of electricity, coal import, transportation, and dollar crisis.