bangladesh, India's neighbor, has reduced the amount of electricity it purchases from adani Power by half. bangladesh cites the decline in electricity usage throughout the winter as the cause. Amid disagreements over the hundreds of millions of dollars in payment, government representatives told news agency Reuters this on Monday, december 2.
As the nation struggles with a lack of foreign cash, adani had already cut the electricity supply to bangladesh in half on october 31 due to payment delays. According to authorities, bangladesh instructed adani to continue providing only half of the electricity for the time being, but it will continue to pay its past dues.
"When they shut off our supply, we were taken aback and incensed. We have informed them that there is no need to operate both units of the plant as winter demand has decreased," stated Md. Rezaul Karim, head of the state-run bangladesh Power Development Board (BPDB).
Under a 25-year agreement struck in 2017 under the former prime minister, Sheikh Hasina, adani has been providing electricity from a $2 billion power plant in Jharkhand, India, which consists of two units with a combined capacity of around 800 megawatts.
The facility only operated at 41.82% capacity in november, the lowest level this year, according to a document seen by Reuters, with one unit down since november 1.
Bangladesh purchased around 1,000 MW per month from adani last winter, according to two BPDB sources. adani had asked the board when it would begin regular purchases but had not gotten a clear response.
According to a representative for adani Power, the company was still supplying bangladesh, but growing debt was a serious issue that made plant operations unsustainable.
As adani had fulfilled its contractual duties, the company was certain bangladesh would fulfill its as well. "We are in constant dialogue with senior officials of BPDB and the government, who have assured us that our dues will be cleared soon," the adani spokesman added.
Karim stated that bangladesh owes adani around $650 million, of which approximately $85 million was paid in november and $97 million in October.
The dues have increased to around $900 million, according to an adani Power source who spoke on condition of anonymity, harming the company's debt profile and raising the possibility of a higher cost of capital.
According to a government document obtained by news agency Reuters, adani charges bangladesh the highest cost of any indian supplier. During the fiscal year that concluded on june 30, 2024, its cost per unit was 14.87 taka, whereas the average for all indian suppliers was 9.57.
Unless the adani contract is overturned by a court, bangladesh now wants to drastically cut pricing.
As the nation struggles with a lack of foreign cash, adani had already cut the electricity supply to bangladesh in half on october 31 due to payment delays. According to authorities, bangladesh instructed adani to continue providing only half of the electricity for the time being, but it will continue to pay its past dues.
"When they shut off our supply, we were taken aback and incensed. We have informed them that there is no need to operate both units of the plant as winter demand has decreased," stated Md. Rezaul Karim, head of the state-run bangladesh Power Development Board (BPDB).
Under a 25-year agreement struck in 2017 under the former prime minister, Sheikh Hasina, adani has been providing electricity from a $2 billion power plant in Jharkhand, India, which consists of two units with a combined capacity of around 800 megawatts.
The facility only operated at 41.82% capacity in november, the lowest level this year, according to a document seen by Reuters, with one unit down since november 1.
Bangladesh purchased around 1,000 MW per month from adani last winter, according to two BPDB sources. adani had asked the board when it would begin regular purchases but had not gotten a clear response.
According to a representative for adani Power, the company was still supplying bangladesh, but growing debt was a serious issue that made plant operations unsustainable.
As adani had fulfilled its contractual duties, the company was certain bangladesh would fulfill its as well. "We are in constant dialogue with senior officials of BPDB and the government, who have assured us that our dues will be cleared soon," the adani spokesman added.
Karim stated that bangladesh owes adani around $650 million, of which approximately $85 million was paid in november and $97 million in October.
The dues have increased to around $900 million, according to an adani Power source who spoke on condition of anonymity, harming the company's debt profile and raising the possibility of a higher cost of capital.
According to a government document obtained by news agency Reuters, adani charges bangladesh the highest cost of any indian supplier. During the fiscal year that concluded on june 30, 2024, its cost per unit was 14.87 taka, whereas the average for all indian suppliers was 9.57.
Unless the adani contract is overturned by a court, bangladesh now wants to drastically cut pricing.
click and follow Indiaherald WhatsApp channel