Bangladesh promises to pay $173 million to Adani

Last Updated on November 10, 2024 5:04 am

The Bangladesh government has decided to issue a new letter of credit (LC) to Adani Power to pay $173 million, according to a report in the Indian media Economic Times.

An official said that the Bangladesh Power Development Board (BPDB) has issued the third LC to Adani Power. Bangladesh Krishi Bank issued this LC; the Indian counterpart of this LC is ICICI Bank. The previous LCs were not consistent with the power purchase agreement.

Bangladesh gets 1,600 MW of electricity from Adani Power. Out of this, its coal-fired power plant in Godda, Jharkhand has two units with a capacity of about 800 MW.

An official said that Adani Power has demanded an additional $15-20 million from BPDB. If this money is not given, the company will not restart the first 800 MW unit that was shut down. Which was shut down last week.

The company meets about 10 percent of Bangladesh’s electricity needs. Adani signed a 25-year power purchase agreement (PPA) with BPDB in 2015.

An industry official told the Economic Times that BPDB is gradually making payments after receiving a loan from the IMF.

The official said that between July and October, Adani Power owed about $400 million. Of this, Bangladesh has paid at least half of the dues.

Adani has to pay about $95-97 million every month for power.

In September, Adani Group Chairman Gautam Adani requested Bangladesh’s chief advisor Muhammad Yunus to intervene in the urgent payment of the power producer’s about $850 million dues.

The company again wrote to BPDB to pay the dues by October 30, threatening to cut off power supply if the bill was not paid in October. The letter said that if the bill was not paid, power supply would be cut off from October 31 under the PPA.