The Bangladesh power board has issued a fresh letter of credit (LC) worth $173 million (over Rs 1,450 crore) to Adani Power for continuous power supply, according to people aware of the development. The move comes after Adani Power cut electricity supplies by half and threatened to stop supplies this week, over unpaid dues of $843 million (over Rs 7,000 crore).
“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 supplies nearly 1,600 MW power to Bangladesh from its coal-fired plant in Godda, Jharkhand. It has two units of nearly 800 MW each.
“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 development.
The company meets 10% of Bangladesh’s electricity needs. The 25- year power purchase agreement (PPA) with BPDB was 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.
Between July and October, payment due to Adani Power is around $400 million and Bangladesh has paid less than half of it, said the official.
Monthly payments for power supply due to Adani Power amount to around $95-97 million. Bangladesh’s foreign currency reserves fell amid a political turmoil that ousted the Sheikh Hasina government in August. Bangladesh has been facing a challenge in generating dollar revenues and using the same for payment of imported electricity and oil. The interim government, which replaced Sheikh Hasina, has sought an additional $3 billion loan from the IMF in addition to an existing $4.7 billion bailout package.
Adani Group chairman Gautam Adani had this September written to Muhammad Yunus, the chief adviser to the Bangladesh government, seeking his intervention in the early liquidation of nearly $850 million of receivables to the power producer.
The company wrote to the BPDB again last month requesting payment of the dues by October 30 and warning that a failure to clear the bills would lead to suspension of power supply by October 31 under the PPA. In addition to Adani Power, SEIL, NTPC Ltd and PTC India Ltd also sell power to Bangladesh.
Source: The Economic Times
BDST: 1208 HRS, NOV 09, 2024
SMS
