Adani Power is facing financial difficulties in importing coal required for power generation at its Godda plant located in Jharkhand
Bangladesh is fast-tracking payment of around $800 million it owes to billionaire Gautam Adani-led Adani Power before the November 7 deadline. Ahead of the deadline, the company has reduced electricity exports to the country from 1,400 MW to around 700-800 MW this month, Reuters reported, citing sources.
The Adani Power supplies electricity to Bangladesh via its Godda plant located in Jharkhand. Currently, due to the financial crunch faced by the company in importing coal required for power generation, it has set out a deadline for payment of dues.
“Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million,” Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government, told Reuters.
Earlier in August this year, Bangladesh Bank’s Governor Ahsan H. Mansur, in a Bloomberg interview, said if we fail to make payments to Adani Power, the supply of electricity will be cut.
“If we don’t pay them, they will stop providing electricity,” said the Governor.
Bangladesh’s financial troubles to pay bills began since the Russia and Ukraine war broke out in 2022 as the fuel prices surged. The matters became worse after political unrest followed by Prime Minister Sheikh Hasina’s resignation. The country reached out to the World Bank to rescue it from the mounting financial stress. According to a BBC report, the interim government of the country sought an additional $1.5 billion from the World Bank and $1 billion from the Asian Development Bank and the Japan International Cooperation Agency.
Moreover, Adani Power isn’t the only company that supplies power to Bangladesh. Few Indian state-owned firms like National Thermal Power Corporation Ltd and Power Trading Corporation of India Ltd are the companies that export electricity to the country.
In November 2017, Adani Power signed a 25-year power purchase agreement (PPA) with the Bangladesh power development board to supply 1,496 MW from its Godda plant in Jharkhand. According to the deal, 100 per cent of the power generated by the plant is supplied to Bangladesh. It is also India’s first transnational power project and commissioned power supply since June 2023.
“Godda power plant will serve as a symbol of friendship and herald a new phase in the multifarious and long-standing relations of India and Bangladesh,” said CEO Adani Power SB Khyalia, according to the company’s website