Adani Power Jharkhand Limited (APJL), a fully-owned subsidiary of Adani Power in India, has cut its power supply to Bangladesh by half due to unpaid bills totalling $846 million, as reported by local media on Friday. 

Data from Power Grid Bangladesh PLC indicated that the Adani plant cut back on its electricity supply on Thursday night, according to The Daily Star newspaper. Bangladesh experienced a power shortfall of over 1,600 megawatts (MW) on the night between Thursday and Friday. Currently, a plant that usually produces 1,496 MW is only generating 700 MW from one of its units, according to reports. Previously, Adani sent a letter to the power secretary requesting that the Bangladesh Power Development Board (PDB) pay its overdue bills by October 30.

In a letter dated October 27, the company warned that if the bills are not paid, it will have to take action according to the Power Purchase Agreement (PPA) by cutting off the power supply on October 31. The company stated that the Power Development Board (PDB) has not provided a letter of credit (LC) for $170.03 million from Bangladesh Krishi Bank and has also failed to pay the outstanding amount of $846 million.

A PDB official stated that they had previously paid off some of the outstanding dues, but since July, Adani has been increasing its charges compared to earlier months. According to him, the PDB has been paying about $18 million per week, but the charge is over $22 million. He said that they had sent Krishi Bank the payment from last week as well, but the bank was unable to create a letter of credit against it because of a dollar shortage. "This is why the due payments increased again," he claimed.

Regarding the extra payment, he stated that in February of last year, the PDB brought up the issue of coal pricing, and as a result, they signed a supplemental agreement requiring Adani to provide coal prices that were lower than those of the other coal-fired power plants. According to the report, Adani has resumed charging in accordance with the PPA when the one-year supplemental arrangement has ended.

Under the Power Purchase Agreement (PPA), coal prices are determined by the average of two coal indices: the Indonesian coal index and the Australian Newcastle index, leading to higher prices. Adani has stated that during the period when supply is suspended, the company retains the right to collect capacity payments as outlined in Section 13.2(1) of the PPA. Since the new interim government took office after the removal of former Prime Minister Sheikh Hasina, Adani has been urging them to settle the outstanding payments.

On August 8, an interim government headed by Nobel Laureate Professor Muhammad Yunus was formed in Bangladesh. Gautam Adani, the chairman of the Adani Group, also sent a letter to Chief Adviser Yunus.