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Utilities
In a significant development, Adani Power has restored its full electricity supply to Bangladesh, marking the end of a four-month period where power was reduced due to payment delays. This move comes as Bangladesh has begun making regular payments to Adani Power, aiming to clear outstanding dues and stabilize the power supply for the summer season. The scenario highlights both the economic challenges and cooperative efforts between India and Bangladesh in the energy sector.
The issue began on October 31, 2024, when Adani Power halved its electricity supply to Bangladesh. This decision was made due to payment delays caused by Bangladesh's foreign exchange shortage. The reduction in supply led to the shutdown of one of the two equal-sized units of the power plant located in Jharkhand, India[1][3]. Bangladesh initially requested to continue receiving half of the usual power supply during the winter months, citing lower demand[1].
As the summer season approaches and demand for electricity increases, Bangladesh's Power Development Board (BPDB) requested Adani Power to resume full supplies. Adani Power has agreed to restore the full 1,600 MW power supply from its plant in eastern India, which is crucial for meeting Bangladesh's electricity needs[1][2]. The resumption of full power supply is a result of Bangladesh committing to regular payments of approximately $85 million per month to clear the outstanding dues[3].
Bangladesh's payment delays have been a significant challenge for Adani Power. At one point, the outstanding dues were nearly $1 billion, though the figure has decreased to about $700 million as Bangladesh continues to make payments[3]. There are discrepancies in the amount owed, with an Adani source stating around $900 million in December 2024, while BPDB reported it to be approximately $650 million[2].
Despite the resumption of full power supply, Adani Power has not agreed to Bangladesh's requests for discounts and tax benefits. These concessions were worth millions of dollars and had been a part of previous agreements[1][2]. Adani Power is firm on invoking the terms of the power purchase agreement (PPA), which does not include such benefits at present[1].
Adani Power supplies nearly 10% of Bangladesh's electricity needs through its plant in Jharkhand. The PPA signed in 2015 includes a sovereign guarantee from the Government of Bangladesh, ensuring a stable revenue stream for Adani Power[3]. The agreement is crucial for both parties as it helps Bangladesh meet its power demands while providing Adani with a substantial export market.
With regular payments resuming and full power supply restored, both Adani Power and BPDB are working towards a stable partnership. However, the ongoing discussions between the two sides suggest that there are still several unresolved issues, including the pricing of power tariffs and the calculation of dues[1][2]. Despite these challenges, the resumption of full power supply is a positive step towards ensuring consistent electricity supply to Bangladesh, especially as it prepares for the peak summer demand.
The resumption of full power supply not only enhances the energy security of Bangladesh but also reflects the strategic economic cooperation between India and Bangladesh. It underscores the importance of reliable energy supply chains and effective financial management for sustaining such partnerships.
In conclusion, while Adani Power has restored full electricity supply to Bangladesh, the path forward involves addressing the ongoing payment and pricing issues between the two parties. Ensuring stability in these transactions is crucial for maintaining long-term energy security and fostering economic cooperation.
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