Bangladesh faces power supply cuts due to unpaid bills to Adani

Bangladesh is in trouble with its electricity supply because it can‍‍`t pay a large bill to the Indian company Adani. As a result, Adani has reduced the electricity it sends to Bangladesh by half. 

The outstanding bill is a huge $886 million, which is about 10,350 crore taka. Because of this, one of the power plant‍‍`s units has been shut down.

Since July, Adani has been charging higher rates for electricity because the price of coal has increased. 

They are also pressuring Bangladesh to pay the overdue amount. 

Officials say that Adani has cut power production down significantly, which they call a “one-sided” agreement.

Muhammad Fouzul Kabir Khan, an advisor to the Ministry of Power, Energy, and Mineral Resources, explained that just paying the bills is not enough. 

He said they will not pay extra charges, and the issue of coal prices will be handled by the Power Development Board (PDB). 

A committee is currently reviewing the contracts with Adani.

Last year, before power generation started, there was a lot of disagreement over coal prices. 

The PDB refused to accept the high costs, but Adani later agreed to lower their rates. 

They promised to provide coal at cheaper prices than those from the Payra and Rampal power plants. 

However, now, just a year later, Adani is asking for a 22% increase in their prices again.

Before the cut, Adani was supplying 1,496 megawatts of electricity daily from a plant in Jharkhand, India. 

After closing one unit on October 31, the electricity supply has been halved, leading to load shedding in Bangladesh, which has increased to almost 1,500 megawatts.

PDB officials mentioned that on October 27, Adani sent a letter to the electricity secretary, demanding payment of the outstanding bills. 

The letter explained that due to the large amount owed and a lack of credit support, Adani was unable to pay their suppliers and contractors.

In the letter, Adani warned that if payment was not made by October 31, they would shut down the power plant. 

Unfortunately, since the payment was not made, they went ahead and closed one of the units at midnight on October 31.

Gautam Adani, the head of the Adani Group, had previously written to Chief Advisor Dr. Muhammad Yunus, asking for the overdue electricity payments. 

Officials from the Power Division noted that the PDB had opened a letter of credit for nearly 2,000 crore taka at Bangladesh Krishi Bank for Adani. 

However, due to a shortage of dollars, they could not process the payment.

It’s also important to remember that during the Awami League government, a special bond was issued to pay off overdue electricity bills. 

This raised 20,620 crore taka from the market, with City Bank and Pubali Bank involved in helping settle the debts of private power plants.

Review of Contracts

The previous government amended a law to allow contracts to be made without tenders, which has been criticized as a liability waiver law. 

Now, the interim government is forming a national committee to review these contracts.

In a meeting on September 28, this review committee decided to gather information about 11 power plants, including the one operated by Adani. 

The Power Division has instructed that all necessary data and documents be submitted to the committee.