The ongoing crisis in Bangladesh has led the government to urgently seek foreign currency to settle outstanding payments owed to Indian power companies, specifically SEIL Energy and PTC India.
In an effort to address these financial obligations, Rupali Bank of Bangladesh has formally communicated with the lenders of these companies, namely ICICI Bank and IndusInd Bank.
Communication from Rupali Bank: In letters sent on September 4 and 5, Rupali Bank conveyed that the Bangladesh Power Development Board (BPDB) has made requests for payments according to the invoices submitted by the Bangladesh Bank and other local sources.
The bank emphasized that they are diligently working to secure the necessary foreign currency and assured that payments would be made as soon as feasible.
Outstanding Dues and Payment Status: Sources familiar with the situation revealed that these communications were part of the response to letters of credit submitted by power companies, including SEIL Energy and PTC India. Currently, SEIL Energy is awaiting a payment of approximately $190 million from BPDB, while PTC India is owed around $79 million. Unfortunately, PTC India has not responded to inquiries regarding this matter.
Action by Indian Power Companies: Due to the delays in receiving payments, all Indian power companies, including SEIL Energy and PTC India, have started to present letters of credit to recover their dues. PTC India, in particular, has been supplying 250 MW of electricity to BPDB through the West Bengal State Electricity Distribution Company since 2013, following their participation in an international bidding process initiated by BPDB. Notably, power exports to Bangladesh constitute approximately 6.54% of PTC India's overall turnover.
Current Challenges and Future Outlook: The financial distress faced by the Bangladeshi government is a significant concern not only for the local economy but also for foreign entities involved in providing essential services such as electricity.
The inability to promptly settle dues can strain relationships between Bangladesh and Indian power companies, potentially impacting future collaborations and investments.
As Rupali Bank continues to seek solutions for arranging foreign currency, it remains critical for all parties involved to maintain open communication to facilitate smoother transactions in the energy sector. —India Hood
