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Five Indian power companies that supply electricity to Bangladesh are owed more than $1 billion
Five Indian power companies that supply electricity to Bangladesh are owed more than $1 billion, according to a report by The Economic Times. Of this, approximately $800 million is owed to Adani Power, which supplies electricity from its 1.6 GW coal-fired plant in Godda, Jharkhand, through a dedicated transmission corridor.
SEIL Energy India is owed around $150 million as of June 30, 2024, under its power purchase agreement for 250 MW with Bangladesh. The country, which has recently experienced severe political unrest, also owes NTPC nearly $80 million for supplying around 740 MW of electricity from three of its plants. Meanwhile, PTC India, which supplies 250 MW of power from West Bengal State Electricity Distribution Co to the Bangladesh Power Development Board, is owed $79 million, although it managed to recover $46 million by August 25. Power Grid Corporation of India is owed $20 million.
Despite the significant outstanding payments, these companies have continued to supply power to Bangladesh. However, this situation may not be sustainable indefinitely, as companies must maintain financial stability.
The Godda plant, which uses imported coal and was fully commissioned in July 2023, was expected to provide a more cost-effective alternative to liquid fuel-generated electricity in Bangladesh. However, the company now faces challenges in sustaining operations without payment, particularly when dealing with upfront costs for coal, spares, and other operational necessities.
The financial strain in Bangladesh has been exacerbated by ongoing political turmoil, which recently resulted in the ousting of the previous administration amid violent protests. Bangladesh Bank’s newly appointed Governor, Ahsan H Mansur, has confirmed the substantial debt owed to Adani Power, acknowledging the critical importance of settling these payments to ensure continued electricity supply.
Adani Power, along with other Indian power providers such as NTPC and PTC India, is currently engaged in discussions with Bangladesh’s interim government to resolve the issue.
The economic crisis in Bangladesh has deepened, with arrears across various sectors reportedly reaching $2 billion. Despite the military’s intervention in establishing an interim government to quell unrest, the country’s financial woes continue to raise concerns about the stability of its international commitments, including those with Indian power suppliers.
First Published: Aug 27 2024 | 9:47 AM IS