The Adani Group has warned Bangladesh that it will completely suspend power supply to the country by November 7 if overdue payments of around $850 million (nearly Rs 7,200 crore) are not cleared, The Times of India reported on Sunday.
This comes a day after The Daily Star reported that had cut the electricity supply to Bangladesh by half due to non-payment of dues.
The Adani Group exports electricity to Bangladesh from its unit in Jharkhand’s Godda district under an agreement signed in 2017.
In September, the Financial Times reported that the Adani Group had warned the neighbouring country that its overdue payments had become unsustainable.
According to The Times of India, the conglomerate had set October 31 as the deadline to clear dues of $170 million (nearly Rs 1,500 crore). While the Bangladesh Power Development Board attempted to secure a letter of credit through Krishi Bank, the move reportedly did not meet the terms of the power purchase agreement, unidentified sources told the newspaper.
Shortage of dollars was also reportedly one of the reasons for Bangladesh’s failure to make the payment.
Due to this, Adani Power’s Godda Plant supplied only 724 megawatts to Bangladesh, out of the installed capacity of 1,496 megawatts.
“We are trying to meet the gap by running other plants,” Rezaul Karim, chairman of the Bangladesh Power Development Board, told AFP on Sunday.
Karim said Bangladesh was negotiating with the Adani Group and “informed them that it is not possible to make the total payment in a single month”.
“But we are trying to increase the payment size gradually,” said the board’s chairman.
He also said that Bangladesh had paid $97 million (nearly Rs 816 crore) to Adani in October, which was “higher than the previous three months’s payment”.
Adani Group’s power export to Bangladesh
The agreement between the Adani Group and the Bangladesh government was signed when the Awami League government headed by former Prime Minister Sheikh Hasina was in power in Dhaka. As part of the agreement, the plant in Jharkhand’s Godda supplies 7% to 10% of Bangladesh’s base load, or the minimum amount of electricity needed to meet a particular region’s demand.
Opposition parties in India have questioned whether Prime Minister Narendra Modi was directly involved in the deal between the Adani Group and the Bangladesh government.
In Bangladesh too, Adani Power’s electricity exports have long been at the centre of controversy, with experts contending that it entails Dhaka buying power at exorbitantly high prices.
After the Adani Group flagged non-payment of dues, Bangladesh’s interim government had said it was planning to examine the terms under which Indian businesses operate there.
Last year, the Bangladesh Power Development Board wrote to the company seeking that the agreement be revised. While there was no official statement on the revisions sought, an unidentified official had told Bangladeshi news agency UNB that the high prices were the point of contention.
On August 5, Sheikh Hasina resigned as Bangladesh’s prime minister and fled to India amid protests seeking her ouster. Yunus took over as the head of the interim government on August 8.
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