Halving cross-border electricity supply to Bangladesh by India's Adani despite getting the highest-ever monthly payment in October has shocked the current interim government, officials say.
The Indian conglomerate shut one of its two power units in Jharkhand on November 1, which the post-uprising government here took with strong exception.
The government will not be "hostage to any individual power plant no matter how powerful it may be", said Shafiqul Alam, press secretary to the Chief Adviser, on Sunday while explaining the situation.
"We are dismayed and shocked," he told journalist at a press briefing when asked comment on Adani's statement that its power company will completely halt electricity supply to Bangladesh if their arrears were not cleared by November 7.
However, he said that the power ministry didn't yet receive such correspondence from the Indian conglomerate.
He pointed out that the dues to Adani, amounting to US$700 million, were created by the previous dictator as they did not pay the bills in time month after month.
The government is committed to paying the dues to Adani Group, Mr Shafiq said, adding that recently the government paid the company 97 million dollars.
State-run Bangladesh Power Development Board (BPDB) paid US$97 million in October to Adani Power Jharkhand Ltd (APJL), which is around 49.23-percent higher than the month-wise payment made by the previous Awami League government, a senior official of the Ministry of Finance told the FE Sunday.
The fallen government used to pay around US$60-65 million per month to APJL against power purchase from the Indian power conglomerate, the official added.
"The BPDB paid US$87 million to APJL during September, which is also 33.84-percent higher than the highest month-wise payment of US$65 million made by the Awami League government to the power company," he said.
The power board's total payments to the APJL during July and August, when Bangladesh saw a massive uprising that toppled the previous government, however, came to around US$31 million in total.
The state-run power entity, which has a 25-year power-purchase agreement (PPA) with APJL, couldn't make payment properly during July and August as Bangladesh's normal official activities were interrupted due to the student-led mass movement that saw frequent curfews and internet shutdowns, the official explains.
The power exporter halved its cross-border electricity supply to Bangladesh in a hitch over payment backlog from November 1, according to statistics from state-run Power Grid Corporation of Bangladesh Ltd (PGCB).
The company's one unit of the power plant, dedicated to electricity export to Bangladesh, which has the electricity-generation capacity of around 750 megawatts, was switched off at the zero-hour Thursday (November 1), said a senior PGCB official.
This is the first time APJL stopped supplying electricity to Bangladesh over payment row.
It also warned of shutting the remaining power unit, having the generation capacity of 750MW, from November 7 if the BPDB does not clear the payments by next week, the BPDB official added.
"Adani has not demanded full payment $800-$850 Million in 7 days' time. (It has been) cooperating fully and collaborating with BPDB to resolve any issue," the APJL authority said in a media statement issued on Sunday night, without elaborating.
The APJL president, Krishna Rao, in a letter to the Power Division on October 28 stated that "During the period of suspension of supply the APJL reserves its right to recover capacity payments under section 13.2 (1) of the PPA."
According to official data with the BPDB, the APJL authority was supplying around 1,016 MWs of electricity into Bangladesh's national grid on October 31, before the shutdown.
The supplier previously had forewarned the BPDB of "suspending electricity supply from October 31 if its overdue payments worth US$846 million were not cleared by October 30", he said. The Indian power company also alleged that BPDB in the latest instance did not provide requisite letter of credit (LC) for $170.03 million for the power import.
"BPDB has not provided the required LC for $170.03 million from Bangladesh Krishi Bank nor cleared the overdue amount of $846 million as of 27 October 2024," the APJL president stated in a recent letter to the Power Division.
Mr Rao, also president of Joint Coordination Committee, argued that failure to submit the LC and settle the outstanding amount on time constitutes a 'material default' under the power- purchase agreement (PPA) with BPDB, hindering Adani Power's ability to maintain supply.
"Due to significant overdue payments and the lack of an LC, we face difficulties securing working capital for coal suppliers and Operations and Maintenance (O&M) contractors, with our lenders now withdrawing support," he stated.
The APJL in its letter had urged BPDB to address these defaults by 30 October 2024, warning that failure to do so will force Adani to suspend supply on 31 October 2024, with capital-recovery measures enacted under PPA section 13.2(1), said the sources.
Officials say within one week of taking office by the interim government, electricity generation from the APJL plant dropped to almost half during mid-August.
The company had termed the power cuts as an outcome of a technical fault.
"We regret any inconvenience caused by this technical fault. We're working hard to fix the issue at the earliest and restore the full capacity of power generation," an APJL statement clarified then. Sources say APJL is the only foreign firm that produces electricity for Bangladesh from its plant outside the receiving country.
Adani has long been pressing BPDB to clear its dues in time.
Dollar crunch was pushing the power board to pay only a nominal amount to Adani every month, which was far below monthly bills against power purchases, resulting in huge unpaid bills to Adani.
The BPDB is currently struggling to pay dues to many independent power producers, oil-fired rental and coal-fired plants.
Market insiders say power purchase from the APJL plant turned out to be a 'much-debated' venture since the initiation of power supply from the facility last year.
As APJL started supply, BPDB sought a revision of the PPA with the former to import electricity from its Jharkhand plant, to no avail so far. The deal was inked in November 2017 for 25 years to transmit power through a 400kV (kilovolt) dedicated transmission line connected with the national power grid.
Transparency International Bangladesh, an anti-graft watchdog, also called for reconsideration and, if necessary, cancellation of the PPA with APJL.
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