Bangladesh is urgently working to pay off over $800 million owed to Adani Power ahead of a November 7 deadline set by the Indian company, which has already reduced its electricity exports to Bangladesh by more than half, Reuters reported. Adani Power, which supplies electricity to Dhaka from its 1,600-megawatt (MW) Godda plant in Jharkhand, set the deadline for payment as it faces challenges in securing coal for power generation, the report added, citing sources.

Muhammad Fouzul Kabir Khan, the power and energy adviser in Bangladesh’s interim government, informed Reuters, “Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million.” The move comes as Bangladesh experiences power shortages due to decreased supply from Adani Power Jharkhand Limited (APJL), a fully-owned subsidiary of Adani Power, which has limited supply because of unpaid dues totalling $846 million, as reported by local media.

According to Power Grid Bangladesh PLC data, the Adani plant reduced output on the night of October 31, with the 1,496-MW facility now generating only around 700MW from one unit, contributing to a national shortfall of over 1,600MW, according to The Daily Star newspaper. Previously, Adani Power had urged Bangladesh’s power secretary to direct the Bangladesh Power Development Board (PDB) to clear the outstanding balance by October 30.

In a letter dated October 27, the company warned that if dues remained unpaid, it would "be constrained to take remedial action under the Power Purchase Agreement (PPA) by suspending the power supply on October 31." The company added that the PDB had neither secured a letter of credit (LC) for $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding $846 million balance.

The debt dispute stems from changes in the pricing terms between Adani Power and Bangladesh. Following the expiration of a one-year supplementary deal, Adani has reverted to charging rates in line with the original PPA terms, which calculate coal prices based on the average rates of the Indonesian coal index and the Australian Newcastle index—resulting in higher prices for Bangladesh.

During the suspension of supply, Adani stated it reserves the right to recover capacity payments under Section 13.2(1) of the PPA. Since taking office, Bangladesh's interim government, led by Nobel Laureate Professor Muhammad Yunus, has faced repeated requests from Adani Power to clear the overdue payments. Gautam Adani, chairman of Adani Group, has also written to Chief Adviser Yunus, urging the government to settle the outstanding dues after the departure of former Prime Minister Sheikh Hasina’s administration.

This payment issue has placed additional strain on Bangladesh’s power sector, as the country struggles to meet its energy demands amid reduced supply from Adani Power.