TL;DR:
- Adani Power has reduced electricity supply to Bangladesh by over 60% due to $800 million in unpaid dues.
- The supply from Adani’s Godda plant in India dropped from 1,400-1,500 MW in August to around 520 MW as of November 7, 2024.
- Bangladesh has expedited payments, opening a $170 million letter of credit, but the power cuts continue despite this effort.
- Bangladesh’s government is exploring alternative energy sources to avoid being “held hostage” by any power producer.
India’s Adani Power has significantly reduced its electricity supply to Bangladesh, cutting over 60% of its previous output due to an ongoing payment dispute. The reduction comes as Bangladesh owes the company more than $800 million in unpaid dues, according to sources from the Bangladesh Power Grid Company and the Bangladesh Power Development Board (BPDB).
Adani Power, which supplies electricity to Bangladesh from its 1,600 MW Godda coal-fired plant located in Jharkhand, India, initially supplied between 1,400 and 1,500 MW of power. However, since August 2024, the supply was halved to around 700-750 MW. As of November 7, the supply has been further reduced to approximately 520 MW.
The power cuts are a direct result of Bangladesh’s failure to settle its outstanding payments. Despite efforts by the BPDB to expedite payments, including opening a $170 million letter of credit for Adani Power, the supply reductions have continued. According to a BPDB official, “We are gradually paying the dues and will take alternative measures if anyone stops the supply. We will not let any power producer hold us hostage.”
The financial strain on Bangladesh has been exacerbated by a broader economic crisis, including dwindling foreign currency reserves and increased costs of fuel and other imports due to global factors such as the Russia-Ukraine conflict. The country has been facing heightened power shortages, particularly in rural areas, further intensifying the urgency of resolving this issue.
Adani Power has not responded publicly to media inquiries regarding the payment dispute or the reduction in electricity supply. However, a source within Adani Power indicated that the company is adjusting its power exports based on demand from Bangladesh and the status of outstanding payments.
The situation remains tense as both parties work toward a resolution. The interim Bangladeshi government has expressed its commitment to clearing the dues as quickly as possible. Muhammad Fauzul Kabir Khan, an energy advisor to the interim government, stated that while payments are being made incrementally, “We will not allow any power producer to take us hostage or blackmail us.”
Bangladesh relies heavily on Adani Power for about 10% of its electricity needs. The ongoing reductions in supply have raised concerns about further disruptions as winter approaches and demand for electricity decreases slightly with reduced air conditioning use.
Efforts are underway to diversify Bangladesh’s energy sources. The country is preparing to launch its first nuclear power plant in December 2024 with Russian assistance, part of a broader strategy to reduce reliance on coal-fired plants like Adani’s Godda facility.
As negotiations continue between Adani Power and Bangladeshi authorities, it remains uncertain how long the current reductions will persist or whether further cuts could be implemented if payments are not settled promptly.
Source: The Daily Star
