Adani has resumed full electricity supply to Bangladesh amid rising demand, currently supplying approximately 1,362 MW from its APJL plant. The situation improved after the BPDB made partial payments to resolve a significant backlog. Adani has proposed a settlement for overdue payments to avoid late fees, which raises concerns regarding the existing contract terms.
Adani Group has resumed full-scale operations and electricity supply from its power plant to Bangladesh, following a request made at the beginning of Ramadan. The Adani Power Jharkhand Ltd (APJL) currently supplies approximately 1,362 megawatts (MW) against a total capacity of 1,496 MW, as reported by the Bangladesh Power Development Board (BPDB).
The BPDB prompted the Indian conglomerate to reinstate operations at APJL to address the increasing power demand during Ramadan and the upcoming summer season. Previously, in October 2024, Adani had supplied electricity from both units of the plant, each generating 750 MW. However, due to a payment backlog of approximately $850 million, Adani had closed one unit on November 1, 2022, which halved the electricity supply to Bangladesh.
Adani had warned of closing the remaining unit unless the BPDB took action to resolve the overdue payments. The situation changed when the BPDB made a partial payment of $170 million through a credit facility with Bangladesh Krishi Bank. Subsequently, the power board has been making monthly payments of around $85 million, which exceeds the monthly bills for electricity purchased to help clear the outstanding dues.
Despite the payments, a significant backlog remains, with Adani offering to settle the overdue payments of about $800 million by June 2025 to avoid any late-payment surcharges per their Power Purchase Agreement (PPA). They proposed waiving the surcharge if the BPDB ensures timely payment of monthly invoices and clears the remaining dues by June 30, 2025.
Market analysts reveal that the PPA includes a steep 2.0 percent monthly interest penalty for late payments, which can accumulate to about 27 percent annually. The power procurement from APJL has attracted criticism, with calls for a revision or cancellation of the PPA due to its controversial nature since the agreement was established in November 2017 for a 25-year term.
In summary, the reopening of electricity exports from Adani’s power plant to Bangladesh marks a significant step in addressing the country’s rising power needs. The resolution of payment issues and the offer to waive late fees reflect an effort to stabilize the partnership between the two entities. However, ongoing scrutiny regarding the initial contract terms remains a critical issue as stakeholders evaluate the implications of the existing Power Purchase Agreement.
Original Source: thefinancialexpress.com.bd
