New Delhi: Industrialist Gautam Adani's Adani Power Group which continuously supplies electricity in the country and abroad. This group also supplies electricity to the neighboring country Bangladesh. Bangladesh Power Board has issued a new Letter of Credit (LC) worth $173 million i.e. more than Rs 1,450 crore to Adani Power for continuous power supply.
This step has been taken after Adani Power threatened to cut power supply by half and stop supply this week over outstanding payments of $843 million, or more than Rs 7,000 crore. This is the third LC that Bangladesh Power Development Board i.e. BPDB has granted to Adani Power. Agricultural Bank of Bangladesh grants LC and ICICI Bank is its counterpart in India.
1,600 MW power supply
An official aware of the development said the earlier LCs were not in line with the power purchase agreements. Adani Power supplies about 1,600 MW of power to Bangladesh from its coal-based plant in Godda, Jharkhand.
Meets 10% of Bangladesh's electricity needs
It has 2 units of approximately 800 MW each. An official aware of the developments said Adani Power has sought additional payment of $15-20 million from BPDB, failing which the company will not restart the 800 MW first unit, which it had shut down last week. . Adani Power did not respond to email queries. The company meets 10% of Bangladesh's electricity needs.
less than half payment
A 25-year power purchase agreement or PPA with BPDB was signed in 2015. An industry official has said that due to Bangladesh getting a loan from the International Monetary Fund (IMF), the payment from BPDB is coming slowly. The payment due to Adani Power between July and October is about $400 million and Bangladesh has paid less than half of it, the official said.
foreign exchange reserves
The monthly payment for power supply payable to Adani Power is approximately $95-97 million. Bangladesh's foreign exchange reserves declined amid political turmoil that ousted Sheikh Hasina's government from power in August. Bangladesh faces challenges in generating revenue in dollars and using it to pay for imported electricity and oil. The interim government that replaced Sheikh Hasina has sought an additional $3 billion loan from the IMF in addition to the existing $4.7 billion bailout package.
early liquidation
Payment of receivables Adani Group chairman Gautam Adani had this September written to Muhammad Yunus, chief advisor to the Bangladesh government, seeking his intervention in the early liquidation of receivables of about $850 million owed to the power producer.
PTC India Limited
The company again wrote to BPDB last month requesting it to pay the dues by October 30 and warned that power supply under the PPA would be suspended till October 31 if the bills were not paid. Apart from Adani Power, SEIL, NTPC Ltd and PTC India Ltd also sell power to Bangladesh.
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