Bangladesh clears Adani arrears, ‘settles’ issues in power purchase agreement

The BPDB requests power delivery at agreed rate after settling $437 million in outstanding dues

Bangladesh has resolved its payment dispute with India’s Adani Power, clearing overdue bills and removing uncertainty over power supply from the company’s Jharkhand-based plant.

A PTI report citing New Delhi sources reveals that Bangladesh made a record single payment of $437 million in June, settling past arrears, transmission charges, and all issues related to the power purchase agreement (PPA).

Bangladesh now has no pending dues. In addition, it has issued a letter of credit (LC) equivalent to two months’ worth of bills, along with a sovereign guarantee covering all outstanding amounts.

With the financial issues settled, the Bangladesh Power Development Board (BPDB) has formally requested Adani Power to continue supplying electricity from both units of its Jharkhand plant at the contracted rate.

Another Indian news outlet NDTV reports that over the past three to four months, Bangladesh sustained payments of $90 to $100 million per month, ensuring consistency.

The power purchase deal was signed on Nov 5, 2017, with Adani’s coal-fired plant in Godda, built at a cost of around $2 billion to export power to Bangladesh since April 2023.

After the fall of the Awami League government, Adani slashed supply by half on Oct 31 last year, due to payment delays.

On Nov 19, the Bangladesh High Court directed the formation of a high-level committee to review the contract with Adani, and NDTV reports that this review has now concluded with no adverse findings.

Following this positive development, creditors are reportedly expecting a credit rating upgrade for Adani Power Limited -- possibly from "AA" to "AA+.