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The Bangladesh Power Board has reportedly issued a new letter of credit (LC) worth $173 million (approximately Rs 1,450 crore) to Adani Power to ensure uninterrupted electricity supply.
This comes after Adani Power cut electricity supply by 50 percent and warned this week to stop supply due to unpaid bills worth $843 million (over Rs 7,000 crore).
“This is the third LC that the Bangladesh Power Development Board (BPDB) has supplied to Adani Power. Krishi Bank of Bangladesh provided the LC and ICICI Bank is its counterpart in India. The earlier LCs were not in compliance with the power purchase agreement,” said an official aware of the development quoted as said by Economic times.
Adani Power supplies Bangladesh with about 1,600 MW of electricity from its coal-fired power plant in Godda, Jharkhand, which consists of two units with a capacity of nearly 800 MW each.
“Adani Power has also demanded a payment of USD 15 to 20 million from BPDB. If this fails, the company will not restart the first unit of 800 MW that it shut down last week,” said an official aware of the development. AND reported.
Adani Power supplies about 10 percent of Bangladesh’s total electricity production and operates under a 25-year power purchase agreement (PPA) with BPDB, signed in 2015.
“BPDB payments are trickling in as Bangladesh has secured a loan from the International Monetary Fund (IMF),” an industry official was quoted as saying by the newspaper. AND report.
The official disclosed that payments to Adani Power from July to October amount to about $400 million, with Bangladesh having paid less than half of that amount so far.
Adani Power’s monthly electricity dues are approximately $95-97 million.
Bangladesh faces the challenge of generating dollar revenues and using them to pay for imported electricity and oil.
Bangladesh’s foreign exchange reserves have shrunk following the political unrest that ousted Sheikh Hasina’s government in August.
The interim government, which replaced Sheikh Hasina, has requested an additional $3 billion loan from the IMF, on top of an existing $4.7 billion rescue package.
In September, Gautam Adani, chairman of the Adani Group, wrote a letter to Muhammad Yunus, the chief adviser to Bangladesh’s interim government, requesting his intervention in the early liquidation of nearly $850 million in claims against the energy producer.
Last month, Adani Power wrote to BPDB, insisting that dues be paid by October 30 and warning that non-payment would result in the suspension of electricity supply by October 31 under the PPA.
Besides Adani Power, other companies such as SEIL, NTPC Ltd and PTC India Ltd also sell electricity to Bangladesh.
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