The Indian conglomerate Adani Group has issued a warning to Bangladesh's interim government regarding $500 million in unpaid electricity bills.
The debt stems from electricity purchases from the 1,600-megawatt Godda power plant in Jharkhand, India. Adani Group has labelled the growing arrears as "unsustainable," highlighting the severity of the situation as Bangladesh struggles to settle its dues for the power supplied from the plant, according to a report by the Financial Times (FT), a British news agency, on Monday.
The FT report highlights that the arrears have become a major challenge for the interim government, led by Dr Muhammad Yunus, which took office after the fall of Sheikh Hasina’s government last month. The new government has criticised several high-cost infrastructure agreements made under Hasina’s tenure, including those tied to the Adani Power.
In a statement to the Financial Times, Adani Power reaffirmed its commitment to providing a reliable electricity supply to Bangladesh despite the mounting financial strain. The company emphasised, “We are in constant dialogue with the Bangladesh government and have appraised them of this unsustainable situation where we are meeting not just our supply commitment but also [commitments] to our lenders and suppliers in spite of rising receivables.”
$492m overdue
The issue of outstanding payments is part of a larger energy crisis gripping Bangladesh, where total energy-related debts have surged to $3.7 billion. According to energy adviser Fouzul Kabir Khan, Adani is owed $800 million, with $492 million of that amount overdue.
In response, the interim government is seeking financial assistance from international lenders, including the World Bank, to stabilise the economy. Despite Bangladesh's rapid economic growth in recent years, Financial Times article highlights the country's persistent energy shortages, driven by declining domestic gas production.
Critics argue that inefficient practices, such as purchasing electricity without competitive bidding, have fuelled rampant corruption and worsened the crisis.
Adani Group, however, has pledged to continue supplying electricity to Bangladesh saying it would “continue to supply reliable and competitively priced power from our Godda facility to Bangladesh, despite mounting dues”.
Reintroduce competitive bidding
The conglomerate has indicated that the Yunus administration may review previous energy contracts while the interim government aims to reintroduce competitive bidding and enhance regulatory oversight.
In its statement, Adani assured that there would be no disruption in the electricity supply to Bangladesh neither any plans to divert supplies away from Bangladesh, stating, “Currently, our Godda plant is not connected to the Indian power grid and hence there is no question of looking for any alternate supply market.”
“We remain steadfast in our commitment... and look forward to the Bangladesh government for similar reciprocity,” the energy giant added.
