Bangladesh securing forex to settle dues of Indian power firms: Sources

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The crisis-hit Bangladesh government is securing forex to settle the outstanding payments of Indian power firms SEIL Energy  and PTC India, according to letters issued by state-owned Rupali Bank, seen by Moneycontrol. The correspondence was addressed to the companies' lenders, ICICI Bank and IndusInd Bank, which finance PTC and SEIL, respectively.

In the letters dated September 4 and 5, Rupali Bank has acknowledged the amounts due to both companies, and stated that it had received claims against bank guarantees.  "BPDB has requested us to make the payments against the submitted invoices, from Bangladesh Bank and our own sources. We are currently trying to arrange foreign currency and will make the payment as soon as possible," the bank said in both letters.

ICICI and IndusInd did not immediately respond to requests for a comment.

The letters were in response to the LCs (letters of credit) placed by the power producers and suppliers, including SEIL Energy and PTC India, according to a person familiar with the matter.

Sources say that as of now, SEIL is awaiting a payment of $190 million from BPDP, while PTC is owed over $79 million, according to an Economic Times report.  PTC India could not be immediately reached for a comment.

"After failing to get any payment despite the acknowledgement of their dues, Indian power generators and suppliers, including SEIL Energy and PTC, have started presenting LCs for the drawdown of their dues," sources said.

PTC, which facilitates energy transactions between power producers and distribution companies or utilities, supplies 250 MW of power to BPDB from the West Bengal State Electricity Distribution Company. PTC has been supplying the power from 2o013 after it won an international  bid conducted by BPDB. Export of power to Bangladesh comprises 6.54 percent of the  company's turnover.

"There are some issues regarding availability of the dollar to meet Bangladesh's obligations, but we are continuously in touch with them and do not see any threat to the contract,"  PTC interim Chairman and Managing Director (CMD)  Manoj  Jhawar said in a post-earnings call last month.

Meanwhile, in 2018, SEIL won a 15-year contract to supply 250 MW to the neighbouring country for 15 years.

"SEIL is in conversation with the relevant authorities in Bangladesh and have adequately apprised them of this unsustainable situation. While we continue to supply power, we remain hopeful that the authorities will uphold the contractual terms and expedite the clearing of the dues, so that supply can be sustained," SEIL said in an emailed statement.

Five Indian power companies that supply electricity to Bangladesh are owed more than $1 billion, according to a report by The Economic Times. Of this, approximately $800 million is owed to Adani Power, which supplies electricity from its 1.6 GW coal-fired plant in Godda, Jharkhand, through a dedicated transmission corridor.