In brief
Bangladesh's efforts to replenish its payments to Adani Power are intensifying as the country grapples with severe electricity shortages. With the Indian firm threatening to suspend all power supplies unless an $800 million bill is settled, the government has begun partial repayment and is exploring alternative strategies to ensure energy continuity.
Bangladesh is taking urgent action to settle its debts with Adani Power as the nation faces severe power shortages. Recently, electric supplies from the Indian conglomerate were slashed by half, reportedly due to an outstanding $800 million debt. Government officials confirmed to the BBC that the country is processing payments, including a recent letter of credit worth $170 million issued to the Adani group.Adani Power provides about 10% of Bangladesh's electricity via its 1,600-megawatt coal-fired plant located in eastern India. The firm's discontinuation of service poses a significant threat to the already strained power infrastructure, especially as reports indicate that full supply could be suspended unless payments are made by November 7.Fouzul Kabir Khan, energy adviser to the interim government, expressed disappointment at the supply cuts despite ongoing payment efforts. "We are committed to addressing our debts but refuse to be held hostage by any power producer," Khan stated.As Bangladesh ramps up repayments—from $35 million in July to $97 million in October—the interim government continues facing challenges in generating dollar revenues for vital imports like electricity and coal. The country’s foreign currency reserves have diminished during continuing civil unrest and protests that led to the removal of former Prime Minister Sheikh Hasina in August. The new interim leadership is even seeking an additional $3 billion in loans from the International Monetary Fund, on top of an existing bailout package.The energy agreement struck with Adani in 2015, under Hasina's administration, has drawn criticism for its perceived lack of transparency. A national committee is now scrutinizing various energy deals, including this one, to better assess their financial viability.Alongside Adani, other Indian firms like NTPC Ltd and PTC India Ltd continue to supply power to Bangladesh, with partial payments being arranged for them as well. Bangladesh has also initiated operations of some gas-fired and oil-fired plants to tackle the immediate supply deficit, although this may raise overall energy costs.Experts project a slight easing in demand as winter approaches and air conditioning usage decreases. Meanwhile, the government is optimistic that fulfilling its commitments to Adani is essential for ongoing supply stability. The country is also moving ahead with plans to commission its first nuclear power plant in December, aiming to diversify its energy portfolio and reduce reliance on foreign power suppliers. The plant, which has been built with Russian support, comes at a hefty price tag of $12.65 billion, predominantly financed through long-term loans from Russia.
