Adani Power, which exports electricity to Bangladesh from its 1,600 megawatt (MW) Godda plant in Jharkhand, India, has significantly reduced its supply to the neighboring country. The supply, which had been around 1,400-1,500 MW in early August, has been slashed to about 700 MW-750 MW in recent weeks. As of late Thursday, the supply was further reduced to approximately 520 MW. This decision follows a payment dispute over outstanding dues exceeding $800 million.
Adani Power cuts Bangladesh supply by over 60% on payment dispute
Despite the reduction, Bangladesh has been actively working to address the payment backlog. The country opened a letter of credit for $170 million in early November and expedited the payment process. A Bangladesh Power Development Board (BPDB) official confirmed that the Nov. 7 payment deadline set by Adani Power had been lifted, though the supply reduction continued. Bangladesh’s power and energy adviser, Muhammad Fauzul Kabir Khan, stated that the country is gradually settling its dues and would seek alternative energy sources if Adani Power further limits its supply.
Political and Economic Challenges in Bangladesh
The power dispute comes at a time of significant economic pressure for Bangladesh. The country has faced mounting challenges due to rising fuel and goods import costs, a situation exacerbated by the ongoing conflict in Ukraine. Additionally, political instability, including the ouster of Prime Minister Sheikh Hasina in August, has compounded the nation’s difficulties. Despite the reduction in supply, Bangladesh remains firm in its stance that it will not allow any power producer to hold the country “hostage” over payment issues.
Adani Power’s Position
While Adani Power has not publicly commented on the specifics of the payment dispute or the further reduction in power supply, sources within the company have stated that the decision to cut supply was made based on both Bangladesh’s demand and the outstanding dues. The situation remains fluid, with both parties continuing to negotiate terms to resolve the dispute.