Adani Power (Jharkhand) Ltd. (APJL), owned by Indian tycoon Gautam Adani, has received $1.12 billion ($1,229 crore) in electricity charges for the 12 months spanning from June 2023 to May 2024, despite a severe US dollar crisis. Bangladesh Bank has approved additional payments.

According to Bangladesh Bank, as of February 7, the central bank's reserves stood at $2,508 crore.

Sources from Sonali Bank confirmed this development last Thursday, with senior officials of the bank indicating that Bangladesh will annually expend over $1 billion to purchase electricity from Adani.

Between June 2023 and May 2024, energy costs amounted to $664.73 million, while capacity charges totalled $456.55 million. The cumulative disbursements up to May 2024 reached $1,121.28 million.

Sonali Bank, which is responsible for opening letters of credit (LC) for payments to Adani, has requested additional US dollars from Bangladesh Bank.

Speaking anonymously, a senior Sonali Bank official stated, "We are seeking US dollars from the central bank to fulfil payments to Adani as our current reserves are insufficient. The central bank has agreed to assist us."

Most of Adani's payments are delayed due to the prevailing shortage of US dollars. It is anticipated that payments will be made gradually.

According to reliable sources, it would have been preferable if the cost of the Adani contract were lower compared to the Rampal power plant and Payara power plant projects.

As per Bangladesh Bank data, on February 7, the central bank's reserves were $2,508 crore. However, according to the International Monetary Fund (IMF) accounting system BPM 6, the reserve is $1,995 crore. This is a significant decline from August 2021, when reserves exceeded $4800 crore.

Experts warn that alongside energy imports, Bangladesh will also face increasing pressure to repay its foreign debt in the upcoming years. However, there are doubts about whether expatriates' exports and income will witness significant growth.

Bangladesh commenced receiving power from India's Adani Group in April 2023, following a 25-year power purchase agreement, with the Bangladesh Power Development Board (BPDB) granting Commercial Operation Date (COD) to Adani's Unit-1, the Godda 1,600 MW thermal plant.

Initially, Adani initiated power exports to Bangladesh in March 2023 on a trial basis.

Official sources reveal that the state-owned Bangladesh Power Development Board (BPDB) sanctioned a commercial operation date (COD) after an inspection conducted by a three-member technical team led by a superintendent engineer specialising in energy audit.

In 2017, the Government of Bangladesh inked an agreement with Adani. Construction of the power plant in Godda, Jharkhand state, commenced in 2020 by the Indian team.

According to BPDB data, Bangladesh's power generation capacity as of February this year stood at 26,504 MW, with 11,600 MW (approximately 4.38 per cent) being imported. The peak average generation surpasses 10,000 MW in winter and exceeds 15,000 MW in summer. The peak demand in the current fiscal year 2023-24 reached 17,100 MW.

Despite a relatively balanced production and demand scenario, Bangladesh has experienced minimal load shedding over the past few years. However, owing to the scarcity of US dollars and delays in fuel imports, the country witnessed a maximum load shedding of 2,000 MW in May last year.