Adani’s debt will be repaid soon

The government will speed up the payment of Adani Power’s dues after the Indian energy giant threatened to cut power if its arrears were not cleared by November 7.

“We are doing our best to speed up payments as our reserves increase… We can now make cross-border payments without having to dip into the underlying reserves,” chief adviser spokesman Shafiqul Alam told a briefing yesterday.

The government is accelerating the payment to Adani.

“We hope that we can pay Adani about $700 million as soon as possible,” he said, adding that the backlog in Adani’s debt payments was created by the previous government as it did not pay bills on time.

However, he said that the Ministry of Energy had not received any correspondence from the Indian power company regarding the suspension of power supplies due to payment issues.

“If this is true, we are alarmed and shocked. We will not be hostage to any individual power producer, no matter how powerful they may be,” he added.

UNB reported that Adani Power had cut power supply due to outstanding debts and set a deadline for the Bangladesh government to clear up the situation with payments totaling nearly $850 million.

Adani Power had earlier set a deadline of October 31 for the Bangladesh Power Development Board (BPDB) to clear the outstanding amount and issue a letter of credit (LC) worth US$170 million to ensure secure payment.

Although BPDB attempted to issue a letter of credit for the overdue amount through Bangladesh Krishi Bank, the attempt did not comply with the terms of the power purchase agreement, the Times of India reported. A lack of dollars was cited as one of the reasons.

The Adani power plant in Godda, Jharkhand, has cut power supply from October 31, worsening the existing power shortage in Bangladesh.

According to the latest update on the Power Grid Bangladesh (PGB) website, the Adani power plant delivered 724 megawatts on November 1 out of an installed capacity of 1,496 MW.

The Adani power plant is the largest power supplier, followed by Payra (1,244 MW), Rampal (1,234 MW) and SS Power I (1,224 MW) power plants.

According to the media report, Adani has not publicly commented on the situation, but senior management has expressed hope that the situation will be resolved.

The decision to cut off supplies will also impact the viability of the Godda power plant as Bangladesh is the only buyer of power and Adani Power Jharkhand had to leave one of its two 800 MW units idle.

Requesting anonymity, a senior BPDB official told UNB that Adani Power had asked Bangladesh to pay dues in a letter a few days ago.

“Adani did not demand full payment of $800-$850 million within seven days. We are fully cooperating with BPDB to resolve any issue,” the Indian company told The Daily Star through its Dhaka-based PR firm.

However, India’s Ministry of External Affairs (MEA) said the Indian government has no role in the contract.

“This issue is between the two sides. There is a contractual obligation between them: one is a private organization and the other is the government of Bangladesh. The Government of India does not play any role in this contract,” IEA spokesman Randhir Jaiswal told reporters in response. when asked during the weekly briefing on Saturday.