Faced with mounting dues from Bangladesh, Indian power companies have started discussions with Bangladesh government and the country’s Power Development Board (BPDB) to get their dues cleared.
However, they are unlikely to enforce the sovereign guarantee as yet, sources in the industry said.
Adani Power, NTPC Vidyut Vyapar Nigam (NVVN), Sembcorp Energy India, SEIL Energy India and PTC India are the five companies that export power to the neighbouring country that has seen political upheaval recently.
Bangladesh reportedly owes more than $1 billion for power supplied by the Indian companies.
While Adani Power has an average monthly billing of $90-$100 million for its supplies to Bangladesh, it has received $70 million only in the last two months, sources in the company told FE.
“Bangladesh government is making regular payments to us but these are in small amounts and don’t even cover the daily build-up of charges. Our current dues are around $850 million,” the sources said, adding that Bangladesh currently pays $3 million per day, four times a week.
Adani Power 1600 MW plant in Godda, Jharkhand supplies power to Bangladesh and meets 7-10% of Bangladesh’s peak power demand. “It (dues) could impact credit profiles and borrowing costs of the company. They have said that they are trying their best to pay,” the sources said.
For now, the company has maintained that it will continue to supply power to Bangladesh.
“We continue to supply power to Bangladesh despite mounting dues, which are of significant concern and are rendering plant operations unsustainable. We are in constant dialogue with senior officials of the BPDB and the Government of Bangladesh, who have assured us that our dues will be cleared soon. We have maintained the power supply based on their assurances. We are confident they will fulfil their commitments, just as we have diligently upheld our contractual obligations, ” an Adani Power Spokesperson said.
A PTC spokesperson said that the company has a long-term business relation of supplying power to BPDB since 2013 and power supply under current contract is from 2020. “While power supply under the current contract is maintained, the delayed payment from BPDB is being discussed for resolution within the contractual framework of agreement,” the spokesperson said.
BPDB’s outstanding dues to NTPC Vidyut Vyapar Nigam, which supplies 710 megawatt (MW) of power to the country, currently stands at Rs 450 crore, as per the sources. While the country has paid its dues till July, the due date of the payment for the month of August has already passed.
However, sources NVVN said that it is an ongoing process and the dues have not piled up yet. “Earlier too, payments have been delayed and so the pattern is the same. We are receiving regular payments.”
SEIL Energy also supplies 250 MW of power directly to the country while another 200 MW is supplied through PTC under the long-term power purchase agreements.
According to recent reports in Bangladesh media, Syed Masum Ahmed Choudhury, additional secretary in Bangladesh Power Ministry has written to Adani Group assuring payment of dues.
The official is quoted to have claimed that BPDB has been making periodic payments to Indian power companies, even though from June 2024. The board is reportedly experiencing some foreign exchange constraints which are slowly easing up due to the measures taken by the interim government.
According to Choudhury, there has been an improvement in payment status with $29.5 million paid since the interim government took office. “I assure you that the BPDB will continue its efforts diligently to ensure the payment of overdue amount within the shortest possible time,” the reports quoted Choudhary as saying.
Adani Group had earlier written to Bangladesh’s new interim government regarding overdue of payments worth $500 million calling it “unsustainable”.
India exported power worth $1.3 billion, 9.3% of its total electricity exports of $11.06 billion, to Bangladesh in financial year 2023-24, according to data from the commerce ministry.
From: financialexpress
Financial News
