The Bangladesh Bank has authorized state-owned Krishi Bank to remit nearly $732 million to India’s Adani Power, covering dues from March to October 2024, and provide a financial guarantee until next October.

The central bank on Sunday issued a directive that could improve electricity supply to Indian society.

According to Bangladesh Power Development Board (BPDB) data, Adani Power (Jharkhand) Limited delivered only 110 MW on November 9 and 47 MW the next day, despite having a total capacity of 1,496 MW.

BPDB and Krishi Bank confirmed the payment development, which could help address Bangladesh’s current electricity supply challenges.

BPDB President Engineer Md Rezaul Karim told The Business Standard, “Mainly due to the inability of Sonali Bank to provide dollars as per our demand, we have decided to make the payments through Krishi Bank. Starting tomorrow (Tuesday), we will start sending overdue payments from Adani via Krishi. Bank.”

He said it was not possible to make such a large payment in one go, but the amount of installments would now increase.

“Adani has received between $15 million and $25 million per month so far, but we plan to pay $100 million or more every month starting in November. Let’s see how much the situation allows us,” he said. -he added.

The BPDB president said banks must have the capacity to provide dollars as needed, as they also have to manage dollars to settle the import bills of many other organizations. “We will endeavor to process payments as quickly as possible,” he assured.

At an event in the capital yesterday, Bangladesh Bank Governor Ahsan H Mansur said, “According to reports from various media outlets, there is currently no shortage of dollars in the market. Anyone can get dollars from banks if necessary. The BPDB cannot arrange the necessary takas for their dollar payments. »

When asked if BPDB was facing a financial crisis, engineer Md Rezaul Karim said: “Our funding gap is not new; This has been an ongoing problem for some time. However, we are exploring different strategies to overcome this challenge.

The government’s outstanding debt in the power and energy sector has reached a record high of nearly Taka 50,000 crore, with around Taka 45,500 crore owed in the power sector alone between August last year and October this year. This figure exceeds the budget allocation for the current financial year by more than 30%, according to a Finance Division official.

Every month, new dues of Tk 3,500-4,000 crore are added, but with limited revenue collection, the finance ministry has been able to clear only Tk 1,500-2,000 crore per month, said the responsible on condition of anonymity.

On November 3, the chief advisor’s press secretary, Shafiqul Alam, said the caretaker government was working to speed up payments to Adani, which warned of possible power cuts due to unpaid bills .

When contacted, Sanchia Binte Ali, managing director of Bangladesh Krishi Bank, declined to comment on how the bank plans to meet BPDB’s dollar demands in the future.

Instead, she recommended contacting the relevant department within the bank. But at the time of writing this article, no statement has been received by TBS from any department of Krishi Bank.

A senior central bank official said Krishi Bank received an average of $110 million to $120 million in funds in September and October. The bank will need to maintain this level of fund inflow to make payments to Adani.

Since Krishi Bank has limited its export activities, interbank transactions are another key means of raising dollars, apart from remittances. “As a result, we hope that Krishi Bank will manage effectively, even though there is some pressure,” the official added.

The central bank’s letter to Krishi Bank said approval from the relevant government authority – the Energy Division – had to be obtained before making dollar payments to Adani.

Additionally, all payment invoices received from Adani must be approved by BPDB prior to payment. The letter further clarifies that, if necessary, approval from any other relevant government department or organization regarding the importation and payment of electricity should also be obtained.

Adani covers 10% of Bangladesh’s electricity needs. The 25-year power purchase agreement (PPA) with BPDB was signed in 2015.

Adani Group Chairman Gautam Adani had written to Chief Advisor Professor Muhammad Yunus in September last year seeking his intervention in the prepayment of nearly $850 million in receivables from the power producer.

The company wrote to the BPDB again last month, demanding payment of dues by October 30 and warning that non-payment of bills would result in suspension of electricity supply by October 31 under the PPA.

Besides Adani Power, SEIL, NTPC Ltd and PTC India Ltd also sell electricity in Bangladesh.