Adani Power Ltd. and The Bangladesh Power Development Board have reached an agreement on the repayment of dues on 7^th November. The Bangladesh power board has issued a fresh Letter of Credit worth $173 million to Adani Power for continuous power supply. This is the third letter of credit issued by the debt-ridden Bangladesh Power Development Board with unpaid dues exceeding $843 million.

This is the third LC that the Bangladesh Power Development Board (BPDB) has provided Adani Power. Bangladesh’s Krishi Bank has given the LC and ICICI Bank is its counterpart in India. The earlier LCs were not in line with the power purchase agreement,” said an official aware of the development.

Adani Power had earlier cut electricity supplies by half and threatened to stop further supplies over unpaid dues. Adani Power supplies to the neighbouring country Bangladesh from its 1600MW Godda Thermal Power Station in Jharkhand. It started this project in 2023 making an entry to the transnational power projects. The deal is an essential element in India-Bangaldesh ties. 

Bangladesh’s monthly electricity bill for Adani Power supply adds up to $95-97million, the country was hit by an economic and political crisis and paid only $20-40 million every month. Following the mounting dues Adani Power had to close one of its two units at its Jharkhand plant, having its power supply to Bangladeh to 750-800 MW.

“Adani Power has additionally demanded a payment of $15-20 million from BPDB failing which the company will not restart the first unit of 800 MW which it shut down last week,” said an official aware of the incident.

Adani Power meets 10% of Bangladesh’s electricity needs as per the agreement signed in 2015.

“Payment from BPDB is trickling in as Bangladesh has been granted a loan from the International Monetary Fund (IMF),” said an industry official.
Bangladesh’s foreign currency reserves fell amid political turmoil which saw the Hasina government ousted in August. The interim government headed by Md. Yunus received aid from the Asian Development Bank and the International Monetary Fund.

Adani Group Chairman Gautam Adani had requested the repayment of dues to Chief Advisor Md. Yunus of the Bangladesh government in September. The company again requested BPDB last month for payment of the dues by October 30 failure to which will result in disconnecting the power supply.

Following an intense discussion in the last five days which saw the Adani group rejecting the LC once citing the breach of the Power purchase agreement (PPA). The Bangladesh Government agreed to offer a fresh letter of credit worth $170-180 million with immediate validity and partial payment of the dues.

“The total value offered by them (Bangladesh government) is worth around 20% of the dues, while committing that it would clear all the dues in the next 2-3 months. The terms are somewhat favourable now,” said an official to mint anonymously