Adani Power Resumes Full-Scale Electricity Exports to Bangladesh During Ramadan

Adani Power has resumed full electricity exports to Bangladesh, supplying 1,362 MW after BPDB’s request due to rising demand during Ramadan. Previously, Adani had limited its supply over a significant overdue payment issue, but after recent payments were made, full operations were restored. The ongoing negotiations concerning overdue payments and PPA conditions are crucial for future energy supply.

Adani Power Jharkhand Ltd (APJL) has resumed full-scale electricity exports to Bangladesh, responding to increased demand during Ramadan. Official data indicates that APJL supplied approximately 1,362 megawatts (MW) of electricity on Monday, utilizing its capacity of 1,496 MW, as requested by Bangladesh’s power authority to address the rising energy needs.

The Bangladesh Power Development Board (BPDB) had requested Adani to restore operations to meet escalating demand amid Ramadan and the summer season. This resumption follows a period of limited supply after Adani reduced output last November due to an overdue payment issue,
which was around US$850 million. The firm had warned of shutting down another unit if the payment situation did not improve.

Following these tensions, a payment of US$170 million was made by BPDB through a letter of credit from Bangladesh Krishi Bank, easing constraints on electricity generation. For several months, the BPDB has been paying approximately US$85 million monthly to the APJL to address outstanding debts, exceeding the monthly billing to mitigate financial strains.

As the BPDB continues to grapple with a dollar shortage impacting payments to various energy providers, Adani proposed a settlement plan for the overdue balance of approximately US$800 million by June 2025, aiming to eliminate late-payment surcharges. Should BPDB meet its monthly bills and clear debts by the proposed deadlines, Adani has offered to waive these surcharges.

Under the existing Power Purchase Agreement (PPA), a substantial late-payment surcharge of 2 percent monthly, equating to an annual 27 percent, is applied. The electricity agreement between APJL and BPDB has been contentious since its inception, prompted by concerns over the fairness of the arrangement made under the previous Awami League government, which spans 25 years and entails a dedicated transmission line to Bangladesh’s national power grid.

Transparency International Bangladesh, an anti-corruption organization, has urged a reassessment, or potentially cancellation, of the PPA with APJL due to ongoing concerns regarding the terms of the deal.

The resumption of full-scale electricity exports by Adani Power to Bangladesh is a significant development in managing energy demands during Ramadan. The initial payment issues were alleviated when BPDB made a substantial payment. Future agreements and the resolution of overdue payments remain crucial as both parties navigate financial and infrastructural challenges in their long-term energy agreement.

Original Source: thefinancialexpress.com.bd