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Bangladesh Clears $173M Dues to Adani for Power Supply
The Bangladesh government has committed to paying Adani Power more than $173 million to ensure uninterrupted electricity supply, as per a recent report by Economic Times citing government sources. The payment will be made through the issuance of a new Letter of Credit (LC), the third such LC provided to Adani Power by the Bangladesh Power Development Board (BPDB).
The new LC, issued by Bangladesh’s Krishi Bank with ICICI Bank acting as its Indian counterpart, follows a series of unpaid dues and unresolved issues between the two parties. According to an official familiar with the situation, previous LCs did not align with the terms of the existing power purchase agreement (PPA).
The financial strain came to a head after Adani Power threatened to significantly reduce its supply to Bangladesh, citing outstanding dues of approximately $843 million. The company supplies around 1,600 MW of power to Bangladesh, which relies on Adani’s coal-fired plants in Godda, Jharkhand.
Further complicating matters, Adani Power is demanding an additional payment of $15–20 million from the BPDB. If this amount is not paid, the company has warned that it will not resume operations at one of its 800 MW units, which was shut down last week.
Adani Power’s power plants meet roughly 10% of Bangladesh's electricity needs, and the 25-year power purchase agreement (PPA) signed in 2015 stipulates the terms of this supply. However, payments from Bangladesh have been irregular, with a significant backlog. Between July and October, approximately $400 million was due to Adani, but less than half of this amount was paid. Monthly payments for power supply typically range between $95 million and $97 million.
An industry official noted that Bangladesh’s financial challenges are compounded by a loan from the International Monetary Fund (IMF), which has slowed payment timelines.
In September, Adani Group chairman Gautam Adani wrote to Muhammad Yunus, chief adviser to the Bangladesh government, urging swift resolution of the outstanding dues. Last month, the company issued a final notice to BPDB, demanding payment by October 30, with a warning that failure to settle the arrears would lead to a suspension of power supply by the end of the month.
Alongside Adani, other Indian companies like SEIL, NTPC Ltd., and PTC India Ltd. also export power to Bangladesh.