How vulnerable is Bangladesh to Adani’s power shutdown threat?

Despite nearly doubling its generation capacity to meet current demand, fresh questions have been raised about the capacity of Bangladesh’s power sector. The situation has arisen after India’s Adani Group threatened to shut down power supply due to outstanding bills.
Adani Power has continued to supply power to Bangladesh despite receiving a bill of $30 million or 3.66 billion taka (one dollar equals 122 taka). Last Monday (November 10), Adani supplied 836 megawatts of power to the Power Development Board (PDB). However, an Adani spokesperson told us that the PDB now owes Adani its normal bill (not disputed), which includes interest of Tk 4,300 crore ($350 million). Earlier on October 30, Adani had said that the disputed bill was $496 million.
PDB Chairman Rezaul Karim told us last evening that a solution had been reached for the time being. Let’s see what happens. No further comment is possible. Without commenting on this, an official of the power department said, why does the interim government want to keep the matter secret. However, legal opinions are also being taken in this regard.
In a letter dated October 30, Adani Power said that if the outstanding $262 million is not paid by November 10, power supply to Bangladesh will be stopped from November 11. However, Bangladesh will have to pay capacity charges during this period. After this letter, the Bangladesh government moved. The power department held several meetings. Adani has been given a strict letter, which says that legal action will be taken if the power supply is suddenly stopped.
On Tuesday, an Adani Power spokesperson said that Adani wants to supply power to Bangladesh in accordance with all the conditions as per the purchase and sale agreement with PDB. For this, PDB has been requested to pay the outstanding bills on priority basis. So that power supply to Bangladesh continues. It is learned that Adani is getting contradictory bills through manipulation. According to PDB, the price of coal used in the plant is $65 per ton. However, Adani is charging $80. There is a regular difference of $15 to $20 between the two parties. And without resolving this dispute, Adani is demanding the entire bill.
The PDB said that the demand for electricity has come down a lot during the winter season. On a hot day, it was more than 14,000 MW at noon. About 11,200 MW was supplied yesterday afternoon. Of this, Adani has sent 836 MW from across the border, i.e. from Godda.
Power department officials said that Bangladesh has become largely dependent on Adani’s electricity. Because the company supplies 1,600 MW of electricity. If it stops, domestic power plants will be able to supply. However, for this, furnace oil-based power plants will have to be started. The cost of electricity per unit will be more than Tk 26. On the other hand, if electricity is generated using coal, the cost per unit will be Tk 13.
The current interim government has been saying since coming to power that various contracts and bill payments in the power sector will be examined and reviewed. Meanwhile, PDB is in a dispute with Adani over the high price of coal and so far $234 million is being considered as a disputed bill. Adani owner Gautam Adani visited Bangladesh three months ago with this bill completely unnoticed. At that time, he met Power Secretary Farzana Momtaz and said that he would release all the money. Otherwise, he threatened to take the matter to an international arbitration court as per the agreement.
Domestic power companies say that $30 million was given to Adani after he threatened to stop power supply. However, 5-6 months of bills of domestic companies have been pending with PDB for years. In total, these outstanding bills amount to about Tk 45,000 crore.