Adani Power Ltd is stepping up pressure on Bangladesh as it seeks to recover more than $850 million of unpaid electricity bills, said a report by news agency Bloomberg.
Last week, the power producer reduced its supply to Bangladesh by half and may cut the nation off entirely from November 7, said the report citing people familiar with the matter.
“Adani Power is asking the neighbouring nation’s power agency to arrange a letter of credit or repay the money,” said the report.
Bangladesh’s current administration, led by Nobel laureate Muhammad Yunus, is expediting payments to Adani Power, Shafiqul Alam, a government spokesman, told reporters in Dhaka on Sunday.
Dhaka is hoping to “repay about $700 million to Adani as soon as possible,” Alam said, adding that the arrears are mostly a legacy from the previous administration.
Adani Power has set a November 7 deadline for Bangladesh to meet its obligations, a Times of India report said on Sunday.
Electricity production reduced
The reduction by Adani Power began on Thursday night with its 1,496 MW plant now producing just 700 MW.
Adani Power’s latest move exacerbates the electricity deficit in Bangladesh.
The Indian company has been providing electricity to Bangladesh from its coal-fired plant in Godda in Jharkhand.
The reduction in power supply raises the risk of further blackouts in a nation grappling with a financial and energy crisis after weeks of violent protests overthrew Sheikh Hasina’s government earlier this year.
According to government data, Bangladesh is facing an overall daily shortfall of about 1,500 megawatts.
The Bangladesh government is “trying its best to accelerate all international payments,” Alam said on Sunday.
It won’t be “hostage to any individual power producer no matter how powerful they are.”
In an October 28 letter, Adani Power had warned the Bangladesh Power Development Board, or BPDB, that the company would start “suspending power supply” if it did not receive a letter of credit or its dues worth $846 million remained unpaid by October 31.
“We have been facing tremendous difficulties in managing working capital for making payments to coal suppliers” and other vendors due to outstanding payments and “non-availability” of a so-called Letter of Credit, Adani Power had said.
“Also, our lenders have withdrawn the working capital support,” it added.
