According to a credible source, the Adani Group has warned Bangladesh's interim administration, led by Nobel Peace Prize laureate Muhammad Yunus, about late payments on a disputed power project. Bangladesh has accumulated $500 million in outstanding dues, threatening to strain Yunus' administration, which took over following the removal of former Prime Minister Sheikh Hasina through student protests.
Yunus' government blames the country's financial problems on "opaque, expensive infrastructure deals," notably a major arrangement with Adani Power. The agreement, inked under Hasina's leadership, involves the supply of coal-generated electricity from Adani's 1,600-megawatt Godda power plant in India.
Adani Power voiced concern about the unsustainable nature of the growing dues. The business told the Financial Times: "We are in continuous discussions with the Bangladesh government and have made them aware of the unsustainable situation we face in meeting both our supply commitments and obligations to lenders and suppliers, despite the rising receivables."
Despite these issues, Adani Power has reiterated its commitment to providing Bangladesh with dependable and reasonably priced power from the Godda project, even while debts continue to build. Yunus' administration is seeking to get international loans, especially from the World Bank, to help stabilize the country's economy.
Adani Group's Godda facility supplies power to Bangladesh.
Adani Group has made significant investments in Bangladesh's ports, data centers, and energy industries. The agreement between Bangladesh and Adani for the Godda power project was inked during Prime Minister Narendra Modi's 2015 visit to Dhaka. Activists have slammed the project, which became fully operational last year, for its hefty expenses. They stated that importing power from the facility is not financially viable for Bangladesh. However, Adani insists that its power pricing is "very competitive" when compared to other coal-fired power plants.
In reaction to the increasing debt, Yunus' government intends to reinstate competitive bidding for future infrastructure projects and re-examine arrangements made by the previous administration. This assessment will cover not only Indian deals, but also those with China. Bangladesh's government intends to negotiate more cost-effective terms for future projects, while maintaining open to collaborating with any country that provides the best value.
Bangladesh, the world's second-largest textile exporter, has long faced energy problems due to depleted local gas supplies. As political volatility in the country persists, several major apparel firms have moved to India for production, as previously reported by Business Standard.
Electricity exporters will sell power locally in India
Recently, the Indian government changed its laws to allow electricity exporters to sell power domestically, potentially allowing Adani to find new buyers for its Godda power project. However, Adani maintained that it has no plans to divert supply away from Bangladesh, reaffirming its commitment to continue meeting the country's energy requirements.
