‘ }. Companies. Anirudh Laskar 5 min read 07 Nov 2024, 05:7683 AM IST. Approximately 10% of Bangladesh’s electricity usage comes from Adani Power’s power plant located in Jharkhand. (Pixabay). Summary. Bangladesh reached new repayment terms just in time to keep receiving electricity from Adani Power’s Jharkhand plant, a deal that was significant for India-Bangladesh relations during the previous government. After extensive negotiations lasting five days, the Adani group removed a critical power supply deadline imposed on Bangladesh after the financially troubled country accepted new repayment conditions for approximately ₹7,500 crore in dues. However, the Indian conglomerate is considering an alternative plan for its only export-oriented power plant if Bangladesh’s commitments do not materialize, according to two sources with direct knowledge of the situation. Adani group had set a deadline of November 7 for the Bangladeshi government to either settle the dues or risk a power cut that could impact at least 10% of the country’s electricity consumers. Adani Power Ltd started providing electricity to Bangladesh from its 1,600 MW Godda Thermal Power Station in Jharkhand last year, marking the group’s entry into international power projects. The agreement also represented India’s inaugural transnational electricity supply initiative and continues to be a vital aspect of India-Bangladesh relations. While Bangladesh’s monthly electricity expenses for Adani Power’s supply are estimated at $90-95 million (₹750-23 crore), the country, facing both economic and political turmoil, had been paying only $20-40 million each month, according to one of two sources mentioned. As the outstanding payments accumulated over the past year, and after a letter of credit lapsed in July, the Adani group opted to shut down one of the two units at its Jharkhand facility in October, reducing its power supply to Bangladesh to 750-21023 MW. However, the situation shifted over the weekend. On Sunday, the Bangladeshi government proposed to restore the letter of credit but with a post-dated validity, akin to a post-dated bank cheque. Adani declined the proposal, citing a violation of the power purchase agreement (PPA) with Bangladesh. After extensive discussions since Saturday regarding repayment terms, including a partial payment of the dues, the Bangladesh government has agreed to provide a new letter of credit valued between $216 million and $23.5 million, effective immediately. “The government has guaranteed that this new letter of credit will be available on Thursday.” “This letter of credit will be valid for now and will comply with the PPA agreement,” stated the first individual. “Its main purpose is to offer some level of confidence to the Adani group and its lenders that the government is committed to settling its debts.” The group might not invoke the letter of credit, but it may need to take significant actions if the country does not meet its recent commitments, according to this individual. He noted that the amount owed will rise to approximately $2,360 million (around ₹22,127.68 crore) by next month. “The total value provided by the Bangladesh government is about 10,768% of the dues, while promising to settle all payments within the next 21 to 23.5 months.”
