Bangladesh rushes to repay debt as Adani Power cuts supply
What's the story
Adani Power has drastically cut down its electricity exports to Bangladesh over an outstanding debt of over $800 million. The company, which runs a 1,600MW power plant in Jharkhand's Godda, has given a November 7 deadline for the payment, according to Reuters. On October 27, Adani Power had written to Bangladesh Power Development Board (BPDB), warning that failure to clear these dues would lead to a suspension of power supply by October 31 under the Power Purchase Agreement (PPA).
Payment acceleration
Bangladesh hurries to clear debt
Bangladesh is now rushing to pay off its debt (worth $846 million) to Adani Power before the deadline. The Indian company has reduced its electricity exports by more than half, a senior official at Bangladesh Power Development Board (BPDB) told Reuters. The representative revealed that the power supply was reduced to 700-800MW from around 1,400MW earlier this month.
Financial challenges
Struggles in paying bills
Bangladesh has been struggling with bill payments amid costly fuel and goods imports since Russia invaded Ukraine in 2022. The political turmoil that led to the ouster of former Prime Minister Sheikh Hasina in August has only worsened the situation. The country is now being ruled by an interim government under Nobel laureate Muhammad Yunus.
Debt settlement
Bangladesh's efforts to clear debt
Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government, told Reuters that they had cleared $96 million last month. He added that a letter of credit has been opened for another $170 million this month. Despite these efforts, sources told Reuters last month that Bangladesh was reevaluating its contract with Adani Power due to high rates.
Company position
Adani Power's stance on power supply
Adani Power's CFO Dilip Kumar Jha said in a quarterly earnings conference call last week that there were no issues regarding the power supply to Bangladesh. "We hope that there will be no further deterioration in terms of the outstanding," he added. This statement comes amid ongoing talks between Bangladesh and Adani Power over the unpaid bills and reduced electricity supply.