Payment arrears to Indian conglomerate Adani Group against power purchase by Bangladesh has doubled to US$600 million over the past six months reportedly for the relevant government agency's fund crunch.
Unpaid bills to local IPPs, and oil-and coal-fired power plants also kept ballooning as Bangladesh Power Development Board (BPDB) is unable to make payments for not getting funds from the finance authority, said sources.
The outstanding dues of Adani Power Jharkhand Ltda (APJL), a wholly-owned subsidiary of Adani Power Ltd, was around US$300 million during September last year, they added.
APJL happens to be the lone foreign company that produces electricity for Bangladesh from its plant outside Bangladesh. The company was contracted as the country opted for electricity import amid power shortages.
It supplied around 1,014 megawatts of electricity during evening peak hours of March 19, 2024 against its installed generation capacity of 1,496 MWs, according to official data available with BPDB.
In the wake of bill buildup following paltry part payments, sources said, Adani has long been pressing the BPDB to clear its dues in time.
The Ministry of Power, Energy and Mineral Resources recently also requested the Finance Division under the Ministry of Finance to disburse around Tk 380 billion to settle Adani bills, they added.
Meanwhile, the power board, constrained by the current US dollar crunch in the country, has made nominal payment to Adani every month. "The amount is far below the monthly bills against the cross-border electricity buy, resulting in the snowballing of unpaid bills to the Indian business conglomerate," says a senior BPDB official.
Also, BPDB is currently struggling to pay dues to many independent power producers (IPPs) and oil-fired rental and coal-fired plants despite a fundraising measure by the government, he adds.
The government recently issued special bonds worth Tk 120 billion, equivalent to US$1.09 billion, for commercial banks for settling partially the accumulated arrears to independent power producers. But Adani didn't benefit from it as the company doesn't have loans with Bangladeshi commercial banks, according to the power official.
Sources say power purchase from APJL turned out to be a 'much-debated' venture since initiation of electricity supply from the facility last year.
Shortly after the start of power supply, BPDB sought a revision of the power-purchase agreement (PPA) with APJL for importing electricity from its Jharkhand plant, but to no avail so far.
The PPA between BPDB and Adani Power was signed in November 2017 for 25 years and electricity will be transmitted through 400kV (kilovolt) dedicated transmission line connected with Bangladesh's national power grid, operated and managed by Power Grid Company of Bangladesh Ltd (PGCB).
Graft watchdog Transparency International Bangladesh (TIB) also had called for reconsideration and, if necessary, cancellation of the PPA with APJL.
Energy experts have been critical of make-do arrangement for electricity like by hiring rental and quick-rental power plants and IPPs under a special law instead of establishing large-scale plants with local energy as well as expanding wind, solar and hydropower capacity.
Agreements with the private power producers have a guarantee clause on capacity payment in case of government incapacity to buy electricity. However, government authorities say there were efforts to switch to 'no electricity, no pay' modality.
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