Dhaka/New Delhi/IBNS: Adani Power Jharkhand Limited (APJL), a branch of Adani Power, has significantly reduced its electricity supply to Bangladesh due to unpaid bills totaling $846 million, as reported by Bangladesh's The Daily Star on Friday (Nov. 2).

According to Power Grid Bangladesh PLC, the power reduction began Thursday (Nov. 1) night, leaving Bangladesh with an energy deficit of over 1,600 megawatts (MW) overnight.

The Adani plant, originally designed to produce 1,496 MW, is now generating just 700 MW from one unit.

Previously, Adani Power had sent a notice to the Bangladesh Power Development Board (PDB) requesting settlement of overdue payments by Oct. 30.

The letter, dated Oct. 27, warned that if payments were not made, power supply would be halted by Oct. 31 in accordance with their Power Purchase Agreement (PPA).

A PDB representative mentioned that while they had paid off some earlier debts, costs charged by Adani Power have risen to over $22 million weekly since July, while PDB has been managing to pay only around $18 million per week, causing outstanding debts to accumulate.

Additionally, last week's payment to Krishi Bank was delayed due to a dollar shortage, which prevented the bank from issuing a letter of credit.

After a temporary arrangement for reduced coal prices ended, Adani reverted to the original PPA pricing, which bases coal costs on Indonesian and Australian price indexes, resulting in higher costs.

Under PPA rules, Adani stated they could claim capacity payments during any period of supply suspension.

In an effort to resolve the issue, Adani Group chairman Gautam Adani wrote to Bangladesh’s interim government, headed by Nobel Laureate Professor Muhammad Yunus, to address the overdue payments.