Adani Resumes Full Electricity Exports to Bangladesh Amid Payment Negotiations
Adani Power Jharkhand Ltd has resumed full-scale electricity exports to Bangladesh, supplying 1,362 MW of power amidst rising demands during Ramadan. After a history of payment disputes with unpaid bills totaling approximately US$850 million, the BPDB managed to facilitate operations through a $170 million payment. Adani has proposed a plan to resolve over $800 million in overdue payments while waiving late charges if BPDB adheres to a payment schedule.
Adani Power Jharkhand Ltd (APJL) has resumed full-scale electricity exports to Bangladesh, supplying approximately 1,362 megawatts (MW) of electricity, against a total available capacity of 1,496 MW. This resurgence in operations follows a request from Bangladesh amidst the high demands of Ramadan and the approaching summer season. Previously, the company had reduced its supply due to unpaid bills, with one unit shut down since November 2022 due to an outstanding debt of about US$850 million.
The Bangladesh Power Development Board (BPDB) successfully made a payment of US$170 million, enabling Adani to continue operations. Over recent months, BPDB has reportedly made consistent monthly payments of around US$85 million, aimed at settling the overdue payments that had accumulated. Despite ongoing financial difficulties, BPDB is expected to clear its dues to ensure uninterrupted power supply.
In an effort to facilitate the repayment process, Adani has proposed a resolution of outstanding debts amounting to US$800 million by June 2025, aiming to avert a late-payment surcharge as per their Power Purchase Agreement (PPA). Notably, they have offered to waive late charges for bills between January and June 2025, provided that the BPDB adheres strictly to monthly payment schedules and settles all outstanding debts by the June 30, 2025 deadline.
The pricing terms under the PPA, established in November 2017, involve a significant 2 percent monthly interest rate on overdue payments, which accumulates to roughly 27 percent annually. The electricity purchase arrangement has faced scrutiny since its inception, prompting calls from Transparency International Bangladesh for an evaluation and potential cancellation of the PPA, which has been deemed overly favorable to the Indian corporation since its initiation.
The successful resumption of electricity exports from Adani Power Jharkhand Ltd signifies an important development for Bangladesh as it addresses its increasing power demand during Ramadan and the summer months. The negotiations surrounding overdue payments between Adani and the BPDB underscore the ongoing challenges and complexities of cross-border electricity trade, including financial management and long-term agreements. Continued scrutiny and demands for reassessment of the Power Purchase Agreement highlight the critical need for accountability and sustainability in such agreements within Bangladesh’s energy sector.
Original Source: thefinancialexpress.com.bd
