PDB says it owes $141m less than what Adani claims

Infographic: TBS

The Bangladesh Power Development Board (PDB) has disputed Adani Power Jharkhand Limited's claim of outstanding electricity bills, arguing that the company's coal pricing method led to an overcharge of $141 million. Adani states that PDB owes $771 million, but the PDB estimates the actual dues to be around $630 million.

Power Division Secretary Farzana Mamtaz said, "We do not agree with Adani's pricing formula. We are making payments as we deem justified."

The PDB has written to Adani twice in January, requesting an explanation for the high charges and expressing concerns over late payment fees.

Growing Dues and Payment Issues 

Due to Bangladesh's prolonged dollar crisis, Adani's outstanding dues reached $840 million in October 2024. At one point, Adani threatened to cut electricity supply unless payments were made by 7 November. The overall power and energy sector's debt hit Tk50,000 crore in October, with Tk45,500 crore related to electricity.

The PDB has paid Adani around $400 million over the past six months and continues to pay $80-85 million monthly. This is expected to rise to $100 million in summer as electricity demand increases. With rising temperatures, Adani has increased electricity exports to Bangladesh, supplying 1,450-1,500MW last week, peaking at 1,511MW on 18 March.

Why the dispute? 

The PDB argues that Adani is incorrectly applying coal price calculations. The agreement specified that Adani should use two indexes – the Australian Newcastle and the Indonesian Coal Index (ICI). The PDB claims Adani is using additional indexes (ICI2 and ICI3) beyond the agreed ICI1, inflating costs.

Another issue is discounts on coal prices. Initially, Adani applied these discounts in 2023 but stopped midway through 2024. An Adani official said, "Instead of paying our dues, the PDB is demanding discounts. Let them clear the payments first, then we can discuss discounts."

Negotiations underway

PDB Chairman Md Rezaul Karim confirmed discussions with Adani to resolve the issue, with high-level meetings expected after Eid-ul-Fitr. The PDB has already sent two letters requesting price clarifications, but Adani's responses were unsatisfactory.

A government review committee found that Adani's pricing formula increases electricity costs. Additionally, Adani charges a 2% monthly late payment fee, amounting to 27% annually. Since operations began in April 2023 under a 2017 agreement, Adani has billed the PDB $50 million in late payment fees.

Efforts to lower electricity costs

A government review committee has recommended that the PDB negotiate lower coal prices with Adani to make the electricity tariff from the 1,600MW Godda power plant more affordable. In 2023, Adani assured Bangladesh that its electricity prices would be lower than other plants, but in FY24, its per-unit cost was Tk14.87 compared to Tk11.83 at Payra.