Bangladesh government should resolve issues on power dues to Adani, say experts   

With Adani Power’s November 7 ultimatum to Bangladesh to turn off power supply over non-payment of dues, experts said the Bangladesh interim government needs to step in to prevent power outage in the nation. 

According to reports, Adani Power which supplies power to Bangladesh has cut power supply by half from October 31 over mounting dues of around $800 million. Bangladesh is accelerating payments to prevent a power crisis, as per a Reuters report. 

Under the power purchase agreement (PPA) with Bangladesh Power Development Board (BPDB) executed in 2017, Adani Power is to supply 1,496 MW net capacity power for 25 years via a 400 kV dedicated transmission system connected to the Bangladesh grid from its Godda power plant in Jharkhand. The project was commissioned in June 2023 and supplies 100 percent of power to Bangladesh. 

Partha Sarathi Bhattacharyya, former chairman and managing director of Coal India, said that Adani Power can invoke a bank guarantee for the power project given by the Bangladesh government. 

“But this has to be seen from a geo-political situation,” Bhattacharyya told Business Today. 

Recently, PTC India and SEIL Energy India, two other electricity exporters to Bangladesh, wrote to the BPDB to invoke their respective bank guarantees due to unpaid dues for the electricity they supplied. 

A former top bureaucrat in the power ministry expects Bangladesh to make substantial payments to keep going with the agreement with Adani. 

“The country has a crisis in hand. It has already cancelled its LNG contract with Summit Group and oil is very expensive to burn. Coal is the best bet for them and it is also cheaper. By Feb/March 2025, the energy demand will increase in the country and there is a growing crisis. If they had surplus power, the situation would have been different and they could have renegotiated the deal with Adani but now there is a growing crisis,” he told BT. 

According to reports, Adani Power is facing challenges in importing necessary coal required for power generation due to the mounting dues.  

“Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million,” Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government, told Reuters. 

Harsh V Pant from the Observer Research Foundation (ORF) says that geopolitically, it’s not a good scenario and can set a negative precedent for Indian companies for people in Bangladesh already have sentiments against the Indian government for providing a safe shelter to former Bangladesh PM Sheikh Hasina following civil unrest. 

“We (India) won’t be seen as a reliable partner but this scenario is also bad for Bangladesh looking to get investments from international companies. Somewhere, the interim government will have to intervene. Bangladesh is going through an economic crisis but power is a fundamental requirement. As of now, I think the Indian government will let Adani handle it but somewhere it has to ponder over the stakes that India has in the neighbouring nation,” added Pant.