After Adani cut power to Bangladesh due to unpaid dues, they have now set a deadline of November 7 to cut the connection if there is no clarity on the outstanding amount owed, says Times of India.

Bangladesh currently owes Adani nearly $850 million.

Adani has set a deadline of October 31 for the Bangladesh Power Development Board to release the charges and provide a $170 million (about Rs 1,500 crore) letter of credit (LC) to ensure payment security .

Although BPDB tried to issue an LC against the outstanding amount through Krishi Bank, the move was not in accordance with the terms of the power purchase agreement, a source told TOI. Lack of dollars was cited as one of the reasons.

This prompted Adani Power Jharkhand to cut supply from October 31, exacerbating Bangladesh’s power shortage. According to the latest report published on the website of Power Grid Bangladesh (PGB), on Friday, Adani’s plant in Godda (Jharkhand) supplied 724 megawatts against the installed capacity of 1,496 MW. Adani Power Jharkhand is the largest power supplier, followed by Payra (1,244 MW), Rampal (1,234 MW) and SS Power I (1,224 MW) plants.

Joint venture NTPC Bangladesh India Friendship Power Company Bagerhat’s Rampal plant and SS Power I were already running at less than half capacity due to coal shortage, PGB’s daily report said.

Industry sources told TOI that some of the power units have reduced fuel purchase as the crisis-hit nation is unable to make payments on time. Payments from Bangladesh were slower, resulting in a backlog of taxes. While about $90 million is said to have been paid to Adani Power in October, for the previous months, payments were around $20-50 million against monthly bills of $90-100 million. The Jharkhand plant supplies electricity at BDT 10-12/unit (Rs 7-8.50), with the cost linked to coal prices in Indonesia and Australia.

Adani did not comment on the issue, but executives had earlier told TOI that they hoped for a resolution. The delay in payment and more importantly the lack of clarity has prompted India’s largest private power company to take the extreme step as it has to pay its creditors.

The decision to cut the supply will also affect the viability of the Godda plant as Bangladesh is the only power buyer and Adani Power Jharkhand had to leave one of the two 800 MW units idle. A monthly billing of 90-100 million dollars will translate into annual revenues of 1.1 billion dollars (more than 9,000 crore lei) for the company.

Soon after the ouster of Sheikh Hasina’s government in Bangladesh, Adani began exploring the supply of power in the domestic market, given a steady increase in demand and assured payments. The company has been asked to look for local grid connection, which can be routed through a substation in Lakhisarai in Bihar.