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Adani Seeks Bangladesh's Help for Payment Clearance: Gautam Adani, chairman of the Adani Group, has approached Muhammad Yunus, the chief advisor to the Bangladesh government, to assist in clearing $800 million in overdue payments owed by the Bangladesh Power Development Board (BPDB) to Adani Power for electricity supplies.
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Delayed Payments Causing Financial Strain: Adani emphasized that the delayed payments are creating financial pressure, as lenders are becoming stringent. He requested regular payments of routine bills and substantial monthly payments to gradually clear the outstanding dues.
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Power Supply from Jharkhand to Bangladesh: Adani Power has been supplying electricity to Bangladesh from its 1.6 GW coal-based power plant in Godda, Jharkhand, since June last year. Despite a 25-year power purchase agreement (PPA) with BPDB, there have been issues with receiving the full monthly receivables.
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Significant Investment in Infrastructure Amid Challenges: Adani Power invested $2 billion in developing the power plant and transmission infrastructure in just three and a half years, overcoming challenges like the COVID-19 pandemic. The group reiterated its commitment to Bangladesh's energy security and infrastructure development.
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Broader Business Interests in Bangladesh: The Adani Group, through its subsidiary Bangladesh Edible Oil Ltd, also operates in the food sector with oil refineries and rice processing facilities. The group supplies popular edible oil and rice brands in Bangladesh, demonstrating its diverse business interests in the country.
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Appeal for Intervention: Adani’s appeal to Muhammad Yunus indicates the importance of diplomatic and government-level intervention in resolving cross-border business disputes and ensuring financial stability for international projects.
Image Source - ETEnergyworld.com
Chairman of Adani Group Gautam Adani sought the intervention of Muhammad Yunus, chief advisor to the Bangladesh government, to ensure timely payment of dues worth $800 million to Adani Power against the electricity it has supplied into the country, as per reports.
Adani Urges for Payment Clearance on Time
The lenders have now been severe on us as we continue to meet our commitment to Bangladesh," Adani wrote in his August 27-dated letter. He sought Yunus's intervention for the speedy release of $800 million arrears pending with the BPDB. Adani wrote to Yunus requesting regular payment of recurring bills and sizeable monthly payments to liquidate the dues little by little.
Adani Power Commitment and Overdue Amounts
Presently, BPDB owes Adani Power $800 million for supplies made during eight to nine months. The sale of electricity to Bangladesh was from its 1.6-gigawatt coal-based power plant in Godda, Jharkhand, via a dedicated transmission line. The power supply commenced in June last year.
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Long-term Agreement and Payment Issues
Adani Power has entered into a 25-year PPA with BPDB at lucrative rates, according to a report by Care Ratings. However, despite this, the company faced problems in getting payments. Even as the monthly receivables of Adani Power from BPDB are pegged at $90-95 million per month, the actual payment received by it has been only $40-45 million per month. This has resulted in the company piling up dues.
Investment in Power Infrastructure Despite Challenges
Adani wrote in the letter that the company invested $2 billion in building the state-of-the-art power plant and transmission infrastructure. The project was completed in three and half years despite enormous challenges including three waves of the COVID-19 pandemic. I would like to reiterate our commitment to your country's energy security and infrastructure development,
Adani said. He also showed the interest of the group in exploring more opportunities to contribute to the infrastructure development of Bangladesh.
Image Source - Mathrubhumi English
Adani Group's bigger Bangladeshi operations
Apart from the power supply, Adani Group is into a host of diversified operations in Bangladesh via its subsidiary, Bangladesh Edible Oil Ltd. The group operates refineries at Rupshi Mongla and Narayanganj, and an integrated facility in Bogra focusing on rice packaging and rice-bran oil production. We contribute to Bangladesh's food supply through popular edible oil and premium rice brands such as Rupchanda, Meizan, and Fortune,
said Adani.
Adani's request for the intervention of Muhammad Yunus outlines the challenges companies face while operating in international markets, especially when it involves the clearance of payments. It also shows how serious the company is about fulfilling its agreements while trying to seek a stronger role in the economic development of Bangladesh.
With inputs from The Economic Times
Image Source: Multiple agencies
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