Bangladesh has slashed its power imports from Adani Power by half, citing reduced winter demand and ongoing disputes over dues amounting to hundreds of millions of dollars, Reuters reported quoting government officials.
The supply cut, which began on October 31, came after Adani Power reduced power delivery due to delayed payments. This is part of a larger strain on Bangladesh’s financial resources as it grapples with a foreign exchange crisis.
The Adani power was then told by Bangladesh to keep supplying only half of the power.
Md Rezaul Karim, chairperson of the Bangladesh Power Development Board (BPDB), said, “We were shocked and angry when they cut our supply. Winter demand is now down, so we have told them there is no need to run both units of the plant.”
Karim said Bangladesh owes Adani Power around $650 million, with recent payments of $85 million in November and $97 million in October.
However, Adani official cited by Reuters claimed the outstanding dues have escalated to $900 million, jeopardizing plant operations and increasing borrowing costs.
Adani Power operates a $2 billion plant in Jharkhand under a 25-year agreement signed in 2017 during Sheikh Hasina’s tenure as Prime Minister. The plant has two units, each with an 800 MW capacity. However, operations have been scaled back significantly, with one unit shut since November 1, resulting in a record low utilization of 41.82% in November.
“We are in constant dialogue with senior officials of BPDB and the government, who have assured us that our dues will be cleared soon,” said an Adani Power spokesperson
The power pricing structure has become another flashpoint. Adani charges Bangladesh 14.87 taka per unit, significantly higher than the 9.57 taka average charged by other Indian suppliers. With a retail price of 8.95 taka per unit in Bangladesh, the government incurs annual power subsidies of 320 billion taka ($2.7 billion).
This is not the first instance of strained energy ties between India and Bangladesh. Earlier in May 2024, Tripura State Electricity Corporation Limited (TSECL) curtailed power supply to BPDB over dues exceeding Rs 100 crore.
The state has sought immediate release of Rs 135 crore that Bangladesh owes to Tripura in electricity dues as per the power trade agreement made through NTPC Vidyut Vyapar Nigam Ltd.
The situation has further been complicated by anti-India sentiment in Bangladesh. A recent incident involved an attack on an Agartala-Kolkata bus in the Brahmanbaria district, sparking concerns over growing hostility.