Adani Cuts Bangladesh Electricity Supply Over Unpaid Bill

India's Adani Group has cut electricity supply to Bangladesh by half due to unpaid electricity bills. The outstanding bill amounts to $886 million (approximately BDT 10,350 crore). As a result, one of the two units at the power plant has been shut down.

Since July, Adani has been charging higher electricity bills based on the increased cost of coal used at the plant, and they are pressuring Bangladesh to pay the overdue amount. They have already reduced electricity production to below half, which has been termed a "one-sided" agreement by those involved.

Muhammad Faujul Kabir Khan, advisor to the Ministry of Power, Energy, and Mineral Resources, told the media that merely paying the bill is not sufficient, and there is no question of paying the additional amount. The Bangladesh Power Development Board (BPDB) will address the issue of rising coal prices. A review committee has already begun work on the contract in a professional and neutral manner, in line with international regulations.

Last year, significant controversy arose over coal prices even before electricity production began. The BPDB initially refused to pay the high coal prices but later agreed to a reduction offered by Adani. However, now, a year later, Adani is requesting a 22% price increase again.

According to BPDB sources, Adani was supplying Bangladesh with 1,496 megawatts of electricity daily from the two units at the power plant built in Jharkhand. Following the closure of one unit on October 31, the electricity supply to Bangladesh has been cut in half, leading to an increase in load shedding in the country to about 1,500 megawatts.

BPDB officials stated that on October 27, Adani sent a letter to the Secretary of Power demanding payment of the bills. In the letter, they mentioned issues in paying coal suppliers and contractors due to the significant outstanding amount and the lack of letters of credit.

The letter indicated that if payment was not made by October 31, Adani would shut down the power plant. As the payment was not made by that deadline, they closed one unit of the plant at midnight on October 31.

Since the interim government took over, Adani has repeatedly requested payment of outstanding dues. Gautam Adani, the head of the Adani Group, had written to Chief Advisor Dr. Muhammad Yunus, requesting the payment of electricity dues.

Power department officials noted that the BPDB had opened a letter of credit for approximately BDT 20 billion at Bangladesh Agricultural Bank to pay Adani, but due to a dollar shortage, the payment could not be made.

It is worth mentioning that during the Awami League government's tenure, a special bond was issued to settle electricity dues. The government raised BDT 206.2 billion from the market through these bonds, aimed at settling dues owed to private power plants in collaboration with City Bank and Pubali Bank.

The previous Awami League government amended the Special Provision Act of 2010 (revised in 2021) for the rapid supply of electricity and fuel without a tender. Decisions made under this law cannot be challenged in court, hence it has been referred to as a liability release law. The interim government is forming a national committee to review contracts made under this law.

On September 28, a meeting of the National Review Committee decided to gather information and data related to 11 power plants. The Power Department has been instructed to provide all relevant information and documents, including details about Adani's power plant.