Power dues to India: Two suppliers seek to invoke bank guarantees

India's two electricity exporters to Bangladesh, PTC India and SEIL Energy India, have written to the Bangladesh Power Development Board (BPDB) to invoke their respective bank guarantees due to unpaid dues for the electricity they have supplied.

This is at a time when BPDB has started making payments to Adani Power, which has outstanding dues of over $850 million, India's The Economic Times reports citing two industry sources. 

Md Rezaul Karim, chairman of BPDB, told The Business Standard that the two Indian companies have some outstanding payments. "We are making gradual payments to them. However, no decision has been made yet regarding their bank guarantee proposal."

When asked about the total outstanding amount, how much has been paid, and plans for settling the remaining dues, the chairman said, "I don't have the exact figures. However, they do have receivables, and we are giving special attention to settling these payments."

The Economic Times report said SEIL Energy India is owed over $150 million as of 30 June 2024. Its bank guarantee amounts to 285 crore Indian rupees ($341 million). The company has a power purchase agreement for 250MW with Bangladesh.

PTC India is owed over $79 million. Its bank guarantee amounts to 257 crore rupees ($307 million). PTC India since 2013 has been supplying 250MW of power to the BPDB from West Bengal State Electricity Distribution Co, added the report.

"Indian power generators and suppliers, including SEIL Energy and PTC India, have issued a demand notice following the non-receipt of payments through the placement of Letters of Credit," said a source aware of the development, adding that the dues are pending for over eight months and the payment is critical to ensure viability and continuity of power supply to Bangladesh.

In an emailed response, SEIL Energy India spokesperson said, "SEIL is in dialogue with the relevant authorities in Bangladesh. We have adequately apprised the authorities of this unsustainable situation."

He added that while SEIL Energy India continues to supply power to Bangladesh, it remains hopeful the concerned authorities will uphold the contractual terms and expedite the clearing of the dues so that the power supply can be sustained.

PTC India spokesperson said the company has a long-term business relation of supplying power to BPDB since 2013 and the power supply under the current contract is from 2022, said The Economic Times.

"While power supply under the current contract is maintained, the delayed payment from BPDB is being discussed for resolution within the contractual framework of an agreement," PTC India spokesperson added.

In the last few days, however, Bangladesh has started making payments to Adani Power of $4 million to $ 5 million per day. The company had a few days ago written to BPDB for payment of dues. Unlike other Indian companies, Adani Power has a 25-year power purchase agreement.