Adani Power has completely reinstated its electricity supply to Bangladesh. This follows just four months of the company reducing delivery in half because purchasers were slow on payment. The coal-powered plants the company operates in Jharkhand, India, provide 1,600 megawatts (MW) of electricity for the company’s home country. On October 31, it doubled the amount but simultaneously halved the supply because Bangladesh had defaulted on multiple payments. The restoration comes after the two sides’ settlement to a dispute between them under a 25-year franchise agreement executed in 2017.
The cut of power supply also followed Bangladesh’s dues to Adani reached over $850 million. After intense negotiations, Bangladesh has agreed to begin making regular reparation payments. In effect, the country has paid off most of its debt—which now stands at $800 million. The BPDB, as the institution tasked with making these payments, has been in a mad scramble to pay off the outstanding dues.
“We’re making regular payments to Adani and receiving power as per our requirements,” stated Rezaul Karim, chairman of the BPDB.
Both parties signed on to the supply reduction, to begin with. Bangladesh requested that Adani produce just 50% of the promised power during winter months. This major decision was intended to help the country use electricity more effectively. Retrospectively, it aims at times of underutilization.
Adani’s move to restore full power supply will come as a relief during what may be a difficult energy crisis that Bangladesh might face. The continued collusion between Adani and Bangladesh is important to the latter’s energy security and long-term planning. According to their long-term contract’s take-or-pay provision, Adani will still be supplying electricity to Bangladesh through 2042.