Bangladesh Cuts Power Purchases from Adani India Amid Payment Dispute

Bangladesh reduced its power purchase from India's Adani Power by half, citing lower winter demand, according to government officials who spoke to Reuters. This decision came amid on-going disputes over outstanding dues amounting to hundreds of millions of dollars.

Adani Power, whose founder has faced bribery allegations from US authorities—charges he has denied—had initially cut the supply to Bangladesh on October 31 due to delays in payment as Bangladesh struggled with a foreign exchange shortage.

Officials stated that Bangladesh later instructed Adani to continue supplying only half of the power for the time being, although it would continue to pay off its old dues.

Md Rezaul Karim, chairperson of the Bangladesh Power Development Board (BPDB), expressed that they were shocked and angered when the supply was reduced. He mentioned that with winter demand decreasing, they had informed Adani that it was unnecessary to operate both units of the plant.

Adani Power has been supplying electricity under a 25-year contract signed in 2017, during the tenure of ousted Prime Minister Sheikh Hasina, from a $2 billion power plant located in Jharkhand, India, which has two units, each with a capacity of around 800 megawatts.

A document reviewed by Reuters revealed that the plant had operated at only 41.82 per cent capacity in November, the lowest for the year, with one unit remaining shut since November 1.

Two sources from the BPDB noted that Bangladesh had purchased approximately 1,000 MW per month from Adani last winter. They also mentioned that Adani had inquired about when Bangladesh would resume normal purchases but had not received a clear response.

An Adani Power spokesperson confirmed that the company was continuing to supply electricity to Bangladesh, although the growing dues were becoming a significant concern, making plant operations unsustainable. The spokesperson further added that the company was in regular talks with senior BPDB and government officials, who had assured them that the outstanding dues would be settled soon. The spokesperson expressed confidence that Bangladesh would fulfill its commitments, just as Adani had met its contractual obligations.

Karim mentioned that Bangladesh owed Adani approximately $650 million and had made payments of around $85 million in November and $97 million in October.

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