No power supply if dues not settled by 7 Nov: Adani to Bangladesh

After slashing the power supply to Bangladesh by half over unpaid dues, Adani Power has set a deadline of 7 November to switch off the flow of electricity if there is no clarity on settlement of the outstanding amount, reports Times of India.

Currently Bangladesh owes Adani almost $850 million, said the report published today. 

Later in the day, Adani Group in a clarification said it has not demanded full payment in 7 days.

Rather it said that it has been cooperating fully and collaborating with the Bangladesh Power Development Board (BPDB) to resolve any issue, the group said in a press release.

"Adani has not demanded full payment of $800-$850 million in 7-day time. Cooperating fully and collaborating with BPDB to resolve any issue," it said.

Meanwhile, before Adani Group's clarification, Chief Adviser's Press Secretary Shafiqul Alam said the relevant ministry in Bangladesh is yet to receive any such letter from Adani. 

"If it is true, we would say we are dismayed and very shocked," he said while speaking at a media briefing yesterday when his attention was drawn to the report.  

He further said the interim government will be able to make the payment to Adani Power of India with an accelerated effort and stressed that the government will not be hostage to any individual power producer, no matter how powerful it is.

Alam said they are trying their best to accelerate the payment as the forex reserves started rising. "It has made a comeback. We hope we will be able to make the international payment."

He blamed the previous "dictatorship" and noted that the previous government is responsible for the payment backlog.

Preferring anonymity, a top official of the BPDB told UNB that Adani Power requested Bangladesh to pay dues through a letter a few days back.

The TOI report

The Times of India (TOI) report said Adani had set a deadline of October 31 for the Bangladesh Power Development Board (BPDB) to clear the dues and provide a letter of credit (LC) of $170 million to ensure security of payment. 

While BPDB did seek to issue an LC against the outstanding amount through Krishi Bank, the move was not in line with the terms of the power purchase agreement, a source told Times of India. Shortage of dollars was cited as one of the reasons. 

It prompted Adani Power Jharkhand to reduce supply from 31 October, worsening Bangladesh's power shortage, added the TOI report.  

According to the latest report put up on the website of Power Grid Bangladesh (PGB), on Friday, Adani's plant in Godda (Jharkhand) supplied 724 megawatt against the installed capacity of 1,496MW. Adani Power Jharkhand is the largest power supplier, followed by Payra (1,244MW), Rampal (1,234MW) and SS Power I (1,224MW) plants.

NTPC joint venture Bangladesh India Friendship Power Company's Rampal plant in Bagerhat and SS Power I were already operating at less than half the capacity due to coal shortage, PGB's daily report showed. 

While around $90 million are said to have been paid to Adani Power in October, for the earlier months, payments were in the region of $20-$50 million against monthly bills of $90-100 million. The Jharkhand plant supplies electricity at Tk10-12/unit with the cost linked to coal prices in Indonesia and Australia, according to TOI. 

Adani did not comment on the matter, but senior executives had earlier told TOI that they were hopeful of a resolution. The delay in payment, and more importantly the lack of clarity, has prompted India's largest private power company to take the extreme step given that it needs to settle the dues of creditors. 

The decision to snap supply will also impact the Godda plant's viability as Bangladesh is the sole power purchaser and Adani Power Jharkhand has had to leave one of the two 800MW units idle. A monthly billing of $90-$100 million will translate into annual revenues of $1.1 billion for the company.