India’s Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Power, has reduced its power supply to Bangladesh by half due to unpaid dues totaling $846 million, according to local reports on Friday.

The Daily Star reported that data from Power Grid Bangladesh PLC indicated the Adani plant cut its supply on Thursday night. As a result, Bangladesh faced an electricity shortage exceeding 1,600 megawatts (MW) between Thursday and Friday. The 1,496 MW power plant is currently operating one unit, producing only 700 MW.

Previously, Adani Power had sent a letter to Bangladesh's power secretary on October 27, requesting that the Bangladesh Power Development Board (PDB) settle the outstanding bills by October 30. The company warned that failure to do so would force them to halt power supply from October 31 under terms of the Power Purchase Agreement (PPA).

The letter noted that Bangladesh Krishi Bank had not issued a required $170 million letter of credit (LC) nor settled the $846 million outstanding bill. A PDB official explained that although part of the previous balance had been paid, monthly charges from Adani Power have recently increased, with PDB now paying around $18 million per week, while actual charges exceed $22 million.

The official attributed the unpaid balance to a recent dollar shortage, which has delayed the issuance of the LC against last week's payment.

Regarding rising charges, the official noted that after questioning coal pricing last year, PDB signed a one-year supplementary deal with Adani Power, ensuring coal prices lower than those charged by other coal-fired plants. With the supplementary deal now expired, Adani has returned to charging per the original PPA, which calculates coal costs based on the Indonesian and Australian coal indices, raising prices further.

During the supply suspension, Adani Power stated it reserves the right to collect capacity payments per Section 13.2(1) of the PPA. The company has been urging Bangladesh’s interim government, led by Nobel Laureate Professor Muhammad Yunus since August, to address the debt. Adani Group Chairman Gautam Adani also reached out to Chief Adviser Yunus regarding the overdue payments.