Adani asked to resume full-scale power generation

Bangladesh asks the contracted Indian conglomerate to resume full-scale operation of its Adani Power Jharkhand Ltd (APJL) plant as the oncoming summer is to hike country's power demand.

The state-run Bangladesh Power Development Board dispatched a letter to Adani a couple of days back to generate full-capacity electricity of around 1,496 megawatts "as soon as possible", a senior BPDB official told The Financial Express.

"Adani subsequently has moved to generate electricity from both of its two power units," he said.

According to data available with BPDB, the power company supplied around 756MW of electricity into Bangladesh's national grid as on February 8.

The Indian conglomerate had shut one of its two power units in Jharkhand on November 1, 2024 that halved cross-border power supply to Bangladesh over payment backlog worth around US$850 million, said sources.

Shutting power generation over payment row was first such incident in the country.

Adani also had warned of shutting the remaining power unit, having the generation capacity of 750MW, from November 7, 2024 had the BPDB not taken steps for making payment, said the sources.

The power exporter, however, backed down from its threat of shutting power generation entirely after the BPDB ensured payment worth US$170 million after opening letter of credit (LC) by Bangladesh Krishi Bank.

When APJL was set to resume full operation last year, BPDB had asked them not to operate its second unit as the country's electricity demand started getting dampened then with the advent of winter.

Officials have said BPDB has made payment worth around US$85 million per month to APJL over the past several months, which is above the monthly bill against electricity purchase, to clear the overdue payments.

Adani has long been pressing BPDB for clearing its payments.

Dollar crunch was pushing the power board to struggle in paying 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 a couple of years back under what is seen as an overrated deal made by the now-deposed Awami League government.

As APJL started supply, BPDB had sought a revision of the PPA (power-purchase agreement) with the former to import electricity from its Jharkhand plant, but 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 over here.

Transparency International Bangladesh, an anti-graft watchdog, also called for reconsideration and, if necessary, cancellation of the PPA with APJL.

According to an Economic Times report shares of Adani Group company Adani Power surged 4.2 per cent in early trade Tuesday, reaching a day's high of Rs 511.85 on the BSE in India, after Bangladesh asked the firm to fully resume supplies from its 1,600-megawatt plant in India.

This comes after more than three months of reduced sales, during which supplies were halved due to low winter demand and payment disputes, according to a Bangladesh official.

Azizjst@yahoo.com