Bangladesh Government has to increase payments to Adani Power after the company cut its electricity supply by half, reportedly due to an unpaid bill of $800 million.
Two senior officials told that limited payments to Adani are already being processed. Adani currently provides 10% of Bangladesh's electricity from its 1600-megawatt coal plant in eastern India. To address the issue, Bangladesh has issued a $170 million letter of credit to Adani.
Adani has not commented on the power cuts in Bangladesh, which already faces frequent power shortages. Officials say Adani has threatened to stop all electricity supplies if the debt isn’t settled by November 7. However, a Bangladesh Power Development Board official said they don’t expect full supply to be power cut off.
Bangladesh plans to pay off the debt in gradual installments and is hopeful the issue will be resolved soon. Fouzul Kabir Khan, an energy adviser to Bangladesh’s interim government, expressed frustration over the reduced power supply despite increased payments. He stated that Bangladesh will continue repayments and, if necessary, make alternate arrangements to avoid dependency on a single power provider.
Repayments to Adani rose from $35 million in July to $68 million in September and $97 million in October. However, rural areas in Bangladesh continue to experience rising power shortages.
Political disturbance
Bangladesh has been struggling to earn enough dollars to cover essential imports like electricity, coal, and oil. The country’s foreign currency reserves have dropped, especially after months of student-led protests and political unrest that led to the removal of Sheikh Hasina’s government in August.
The temporary government that took over has requested an additional $3 billion loan from the International Monetary Fund (IMF), adding to the existing $4.7 billion bailout.
Under Sheikh Hasina’s leadership, Bangladesh signed a power deal with Adani in 2015, which the current government is now reviewing, calling it “opaque.” A national committee is reassessing 11 past agreements, including the Adani deal, which has faced criticism for its high costs.
In addition to Adani Power, Indian state-owned companies like NTPC Ltd and PTC India Ltd also supply electricity to Bangladesh. The Power Development Board confirmed that partial payments are being made to all Indian power suppliers.
To help meet energy needs, Bangladesh is restarting some gas and oil-powered plants, though experts warn this will raise power costs. Demand is expected to ease in winter as air conditioners are turned off.
Meanwhile, Bangladesh plans to launch its first nuclear power plant in December with Russian support, costing $12.65 billion, mostly funded through long-term Russian loans.
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