After slashing the power supply to Bangladesh over non-payment of dues, Adani Power has set a deadline of November 7 to switch off the flow of electricity if there is no clarity on settlement of the outstanding amount that adds up to almost $850 million (around Rs 7,200 crore), reports the Times of India.
Adani had set a deadline of Oct 31 for the Bangladesh Power Development Board to clear the dues and provide a letter of credit (LC) of $170 million (around Rs 1,500 crore) 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, quoting a source, the Indian daily reported. Shortage of dollars was cited as one of the reasons.
It prompted Adani Power Jharkhand to reduce supply from Oct 31, exacerbating the turmoil-torn country’s power shortage. 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 1,496 MW. Adani Power Jharkhand is the largest power supplier, followed by Payra (1,244 MW), Rampal (1,234 MW) and SS Power I (1,224 MW) 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.
Industry sources told the Times of India that some of the power units have reduced fuel purchase as the crisis-hit nation is unable to make payments on time. Payments from Bangladesh have been slower, resulting in a build-up of dues. 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 BDT 10-12/unit (Rs 7-8.50) with the cost linked to coal prices in Indonesia and Australia.
Adani did not comment on the matter, but senior executives had earlier the Times of India 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.