Bangladesh struggling to muster dollars to pay Indian power debts, sources say

PTC India

20/09/2024 15:36

By Sethuraman N R and Ruma Paul
       NEW DELHI/DHAKA, Sept 20 (Reuters) - Bangladesh's
efforts to clear debts of more than $1 billion owed to Indian
power companies are being hampered by its inability to access
the dollars it requires to pay them, documents showed and
sources familiar with the matter said.
    The country has been struggling to pay its bills due to
costly fuel and goods imports since the 2022 war in Ukraine,
while political turmoil which led to the ouster of Prime
Minister Sheikh Hasina in August has added to its troubles.
    Bangladesh is urgently seeking $5 billion in financial aid
from international lenders to stabilise its dwindling foreign
exchange reserves and its central bank has raised key interest
rates to tame soaring inflation. Last year, it sought a $4.7
billion bailout from the International Monetary Fund.
    "Efforts are on to clear the outstanding payments, but the
current dollar crisis is complicating the process
significantly," an official at the Bangladesh Power Development
Board (BPDB) told Reuters on Friday. 
    Of the more than $1 billion owed to India's power companies,
some $800 million is to Adani Power  ADAN.NS , he added.
    Adani Power did not respond to a request for comment. 
    PTC India  PTCI.NS  and SEIL Energy India Ltd have written
to the BPDB to recover about $80 million and $190 million
respectively in payment for power they provided to Bangladesh,
documents reviewed by Reuters show.
    "PTC has a long term business relation of supplying power to
BPDB since 2013 and the power supply under (the) current
contract is from 2022," a PTC India spokesperson said.
    A SEIL spokesperson said it had informed the Bangladesh
authorities about what it called an "unsustainable situation".
    Bangladesh, which imports nearly 20% of its power from its
neighbour India, has not paid for the electricity for the last
eight to nine months, a source told Reuters.
    SEIL received a contract in 2018 from BPDB to supply power
to Bangladesh over a total period of 15 years.
    "While we continue to supply power to Bangladesh, we remain
hopeful the concerned authorities will uphold the contractual
terms and expedite the clearing of the dues, so that power
supply can be sustained," SEIL said in a statement.
    SEIL and PTC India have bank guarantees relating to their
power contracts with Bangladesh for $34.1 mln and $30.7 million,
respectively, the documents show.
    This has left Bangladesh's Rupali Bank trying to access
dollars to settle payment of about $270 million, as otherwise
the Indian companies plan to cash the guarantees. 
    Rupali Bank and BPDB are working "together for the necessary
U.S. dollar resources from (the) Bangladesh Central Bank for the
purpose of paying bills in foreign currency, which will continue
in the future," the documents show.
    PTC India declined to comment on the specifics of terms and
conditions of the contract, while calls to Rupali Bank went
unanswered due to a weekend holiday in Bangladesh.  

 (Reporting by Sethuraman NR in New Delhi and Ruma Paul in
Dhaka; Editing by Nidhi Verma and Alexander Smith)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))