With a deadline to clear around $850 million in outstanding dues to Adani Power ending on Thursday, Bangladesh is also facing mounting pressure to ensure uninterrupted electricity supply to its consumers in urban and rural areas.
Now, the central question is how ready Bangladesh is to settle its debts and prevent any potential disruptions in power from Adani, a key electricity supplier.
An anonymous official from the Bangladesh Power Development Board (BPDB) said that Adani has significantly softened its stance, backing away from a previous hardline position.
"Adani has assured us that they will not halt power supply if dues remain unpaid by November 7," the official stated, adding that Adani aims to maintain a cordial relationship with Bangladesh.
Adani reportedly recognizes that Bangladesh has the capability to manage the situation even if power is cut, a realization that likely influenced their decision to maintain the supply.
The official said that BPDB is actively trying to clear outstanding dues not only with Adani but also with other power suppliers.
Bangladesh’s foreign reserves remain stable, with growth in recent months providing some leverage in the situation. Efforts are underway to secure low-interest loans from foreign countries, and a $50,000 bond is also being pursued to ease the payment pressures.
The Ministry of Power and Energy reported that Bangladesh made a $10 million payment to Adani in the first four days of November, following a substantial $97 million payment in October.
Since July, the government has reportedly paid a total of $204 million to Adani.
Additionally, in response to the potential disruption in Adani’s power supply, the government has instructed coal, gas, and LNG-based power plants to sustain their production levels.
The official said that winter brings a slight decrease in electricity demand, which may make it more feasible for these plants to meet the country's needs without major shortages.
Adani's hard stance
On Monday, sources from BPDB revealed that Adani has shut down a unit of the power plant due to unpaid bills.
Since October 31, the plant has been supplying 500-735 megawatts of electricity.
In a recent letter, MR Krishna Rao, representative of Adani Power Limited and the chair of the joint coordination committee, indicated that the BPDB did not secure a necessary LC of $170.03 million from Krishi Bank, and that $846 million (Tk10,086 crore) in dues remain unpaid.
As of Wednesday afternoon, Adani's power plant was supplying 725MW to Bangladesh, as confirmed by BPDB.
Bangladesh owes Adani between $800 and 850 million, according to an official from Adani's regional office. Bangladesh has not made any significant payments.
As per the contract, bills are issued weekly based on the electricity supplied, and Bangladesh has been making partial payments. However, most of the bills remain unpaid, and penalties will be imposed if bills are not cleared by the agreed timeframe.
In a letter, Adani Limited urged BPDB to resolve these defaults by October 30 and later November 7; otherwise, power supply would cease on November 8.
Measures being taken
“We need to take immediate steps to keep our electricity supply uninterrupted. We are taking various measures; none of us are sitting idle,” said a BPDB official, requesting anonymity.
The official added that power supply from Adani Power Plant in India may cease due to a coal shortage, an issue that is currently under discussion.
Additionally, due to a coal shortage, coal-dependent power plants in Bangladesh, such as Matarbari, Rampal, SS, and Payra, have halved production and supply. If coal reserves are not increased, these plants will also be forced to shut down.
On coal imports, he explained: “Coal imports are dollar-dependent. The company-owned and privately-owned power plants supplying electricity to us are also experiencing a cash dollar shortage, which is causing issues with coal imports.”
Regarding gas-based power plants, he said: “Our natural gas supply is also not at a satisfactory level, intensifying our energy crisis. While this may not be evident now, the impact will become visible soon. We are taking various steps to address the issue, and work is underway.”
Is Adani moving to terminate?
The BPDB official said that while a review of Bangladesh's contract with Adani is ongoing, Adani has not shown interest in renegotiating.
“They have stated that they will halt electricity supply if payments are not made. Bangladesh is attempting to continue business through negotiation, but Adani has adopted a hardline stance,” he added.
According to the contract, Adani can unilaterally terminate the agreement. If Adani decides to terminate, Bangladesh has limited options, as any attempt by Bangladesh to end the contract could result in a lawsuit.
Asked if Adani's hardline stance tied to international politics, the official said: “Yes, it’s true. The current situation with Adani and Bangladesh’s strained relations is linked to the political and diplomatic consequences of the change in government.”
