India's Adani Power reduces Bangladesh's electricity supply by more than 60% due to payment disagreement

India's Adani Power has further cut electricity supply to Bangladesh as it seeks to recover over $800 million in outstanding dues, according to data from Bangladesh's grid operator and two sources familiar with the situation.

Adani Power, which exports electricity to Dhaka from its 1,600 MW Godda plant in Jharkhand, India, had already reduced the supply this month to 700-750 MW, down from around 1,400-1,500 MW in early August.

On Thursday night, the supply was further reduced to about 520 MW, according to data from Power Grid Bangladesh and an official with the Bangladesh Power Development Board (BPDB). Muhammad Fauzul Kabir Khan, Bangladesh’s power and energy advisor, stated that despite ongoing payments, they would take alternative measures if the supply was halted. "We are gradually paying the dues and will take alternative measures if anyone stops the supply. We will not let any power producer hold us hostage," Khan told Reuters.

This reduction continues despite Bangladesh's efforts to accelerate payment and the lifting of an initial payment deadline by Adani on November 7, according to the BPDB official.

Reuters reported that Bangladesh has opened a $170 million letter of credit for Adani and is speeding up its payments. However, Adani Power did not respond to inquiries regarding the power supply reduction or the payments made by Bangladesh.

A source from Adani Power explained that the reduction in supply is based on both Bangladesh's demand and the outstanding dues. The officials from both the Bangladeshi board and Adani Power spoke anonymously as they are not authorized to speak publicly.

Bangladesh has faced difficulties paying its bills due to high fuel and import costs, which have been exacerbated by the war in Ukraine. Additionally, political instability, including the ouster of Prime Minister Sheikh Hasina in August, has further complicated the situation.