Bangladesh Faces Energy Crisis as Adani Demands $500 Million Payment

9 Sep 2024 , 01:11 PM

Adani Group has issued a strong warning to Bangladesh’s new interim administration, led by Nobel laureate Muhammad Yunus, over the growing backlog of unpaid dues from a major power project. According to the Financial Times, Bangladesh has fallen behind on payments by $500 million, with Adani calling the situation “unsustainable.”

This payment shortage has surfaced as a major obstacle for Yunus’ administration, which assumed power last month after the ouster of former Prime Minister Sheikh Hasina. Yunus’ government has criticised the costly infrastructure agreements signed by Hasina, particularly the problematic agreement with Adani to supply coal electricity from its 1,600-megawatt Godda plant in India.

In a statement to the Financial Times, Adani Power emphasised its continued commitment to provide reliable power to Bangladesh, despite the mounting financial burden. “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,” stated the business.

The financial liabilities are part of a larger energy crisis in Bangladesh, where total power-related debts exceed $3.7 billion. Yunus’ main energy adviser, Muhammad Fouzul Kabir Khan, told the Financial Times that Bangladesh is behind on $492 million of its $800 million debt to Adani. The interim government is requesting financial aid from international lenders, notably the World Bank, to help stabilise the economy.

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