Power supply to be suspended from November 11 if dues are not paid: Adani Power

India's Adani Power has given a final warning to the Power Development Board of Bangladesh (PDB). The company said that if the dues are not paid by November 10 of this month, power supply will be suspended from November 11.

In a letter sent to the PDB chairman on October 31, Adani Power Vice Chairman Avinash Anurag mentioned that despite repeated requests for payment over a long period, PDB has not paid US$ 496 million. Of this, PDB has accepted $ 262 million as 'undisputed dues'.

PDB sources said that there are objections to a large part of the money demanded by Adani, especially around the price of coal. PDB claims that Adani's coal price is $ 10-12 per ton higher than other power plants under the terms of the contract. Despite repeated letters and meetings, it was not possible to resolve the issue.

Last year also, Adani threatened to stop power supply and partially reduced supply for some time.

Adani Power's letter states that as per clause 13.2 of the Power Purchase Agreement (PPA) signed on November 5, 2017, the company has the right to suspend supply if the dues are not paid. They said that if the dues are not settled by November 10, the supply will be stopped from November 11.

The company said that even if the supply is stopped, they will be entitled to receive capacity payment based on the reliable generation capacity of the plant as per the agreement.

Earlier, on September 27, in a letter sent to Chief Advisor Professor Dr. Muhammad Yunus, Adani Group Chairman Gautam Adani wrote that although Bangladesh has made a partial payment, there is still an outstanding balance of about $464 million. He warned that if the outstanding amount is not paid promptly, operations and financing will be severely strained.

PDB is currently working as per the directives of the government-formed 'National Committee for Review of Power Purchase Agreements'. The committee, headed by Justice Mainul Islam, released its initial report on November 2, citing administrative failures and irregularities in the approval process of the Adani contract. The final report is due in January.

In addition, Adani Power has urged PDB to renew its letter of credit (LC). The LC issued through Bangladesh Krishi Bank under the 2017 agreement expired on October 30 but has not been renewed yet. According to the agreement, any delay in renewing the LC can be considered a ‘breach of contract’.