‘We told them there was no reason…’: Bangladesh cuts electricity imports from Adani Power

Bangladesh says it has halved its electricity sales from India’s Adani Power, citing a cold winter and unresolved multimillion-dollar payment problems.

This follows months of financial crisis as Dhaka grapples with a foreign exchange crisis.

Adani Power, which operates a $2 billion plant in Jharkhand under a 25-year contract signed in 2017, had already cut production on October 31, citing late payments.

In response, the Bangladeshi authorities asked the company to keep half of the products it was supposed to pay in anticipation. “The demand for winter is now down, so we have told them that there is no reason to run two plants,” Md. Rezaul Karim, chairman of the Bangladesh Power Development Board (BPDB), was quoted in a Reuters report.

The Adani plant, which has a capacity of 1,600 megawatts, has been operating at low capacity since November 1. A document reviewed by Reuters showed that the plant was operating at 41.82% last month, the lowest this year.

One session has been offline, with no time to restart everything. Last winter, Bangladesh imported about 1,000 megawatts a month from Adani.

Adani owes about $650 million to Bangladesh, although industry sources estimate the total amount to be around $900 million. Payments of $85 million in November and $97 million in October were only slightly lower.

A spokesperson for the company said, “We are in regular discussions with BPDB officials and the government, who have assured us that the refunds we are due will be made as soon as possible.”

Bangladesh has been paying for Adani’s electricity. In the financial year ending June 2024, Adani spent 14.87 taka per unit, higher than the 9.57 taka offered by other Indian retailers. Electricity sold in Bangladesh is priced at 8.95 taka per unit, forcing the government to provide annual subsidies of 320 billion taka ($2.7 billion).

“Because the prices are high, the government has to provide subsidies,” said Muhammad Fouzul Kabir Khan, an energy and energy consultant in Bangladesh. “We want electricity prices, not only from Adani, to drop below average prices.”