Nov 4, 2024
| M Azizur Rahman | The Financial Express
India's Adani changes course and decides to resume power supply from its closed plant unit shortly as payment row eases following accord on LC revision.
Sources said Monday both parties agreed amending letter of credit (LC) terms on payment of US$170 million to the Indian conglomerate.
"We -- the Adani Power and Bangladesh Power Development Board (BPDB) -- all agreed on amendment to the LC and it is now awaiting approval from the Bangladesh Bank," a senior Power Division official involved with the standoff resolution told the FE on the day.
Apart from amending the LC with the state-run Bangladesh Krishi Bank (BKB), the state-run BPDB also paid US$10 million to Adani Power Jharkhand Ltd (APJL) Monday, an insider said.
The power board usually pays the APJL four times a week - Monday, Tuesday, Wednesday and Thursday, he said.
If the payment trend continues, APJL is set to get US$30 million more within this week.
"I hope Indian Adani is preparing to resume operation of its shut unit having around 750MW capacity in next couple of days," BPDB chairman Md Rezaul Karim told the FE.
"We are having fruitful communications with the APJL," he said, adding, "Payments are also being made to the APJL against power purchase."
This is, however, the first time that the BKB has been opening an LC on paying to the APJL against power purchase by the BPDB.
State-run Sonali Bank previously had opened LCs for this purpose of power import from the plant, said sources.
Softening its stance, Adani through a statement Sunday said, "Adani has not demanded full payment $800-$850 Million in 7 days' time. (It has been) cooperating fully and collaborating with BPDB to resolve any issue."
The Indian conglomerate shut one of its two power units in Jharkhand on November 1 over the payment backlog.
This is the first time APJL stopped the cross-border electricity supply to Bangladesh over payment row.
It also warned of shutting the remaining power unit, having the generation capacity of 750MW, from November 7 if the BPDB does not take steps for making payment, said sources.
The APJL president, Krishna Rao, in a letter to the Power Division on October 28 stated that "During the period of suspension of supply the APJL reserves its right to recover capacity payments under section 13.2 (1) of the power purchase agreement (PPA)."
According to official data with the BPDB, the APJL was supplying around 732 megawatts of electricity from its one operational unit.
The supplier previously had forewarned the BPDB of "suspending electricity supply from October 31 if its overdue payments worth US$846 million were not cleared by October 30.
The Indian power company also had alleged that the BPDB in the latest instance did not provide requisite LC for $170.03 million for the power import.
"BPDB has not provided the required LC for $170.03 million from Bangladesh Krishi Bank nor cleared the overdue amount of $846 million as of 27 October 2024," the APJL president stated in a recent letter to the Power Division.
Adani has long been pressing for paying off its dues.
Dollar crunch was pushing the power board to pay only a nominal amount to Adani every month, which was far below monthly bills against power purchases, resulting in huge unpaid bills to Adani.
The BPDB is currently struggling to pay dues to many independent power producers, oil-fired rental and coal-fired plants.
Market insiders say power purchase from the APJL plant turned out to be a 'much-debated' venture since the initiation of power supply from the facility last year.
As APJL started supply, BPDB had sought a revision of the PPA with the former to import electricity from its Jharkhand plant, to no avail so far. The deal was inked in November 2017 for 25 years to transmit power through a 400kV (kilovolt) dedicated transmission line connected with the national power grid.
Transparency International Bangladesh, an anti-graft watchdog, also called for reconsideration and, if necessary, cancellation of the PPA with APJL.
News Link: Adani changes course, decides to resume power supply soon