The translation of the heading is: "Adani Group puts Bangladesh under pressure: Reductions in power supply due to overdue payments.
- Bangladesh activates more expensive energy sources for power generation.
- Adani Group threatens Bangladesh with supply stoppage due to overdue payments.
Eulerpool News·
The Indian conglomerate Adani Group has started to reduce power supply to Bangladesh and is threatening a complete cessation of deliveries as the new government in Dhaka struggles with outstanding payments. The company, owned by billionaire Gautam Adani and focused on infrastructure projects, cut cross-border power flows from its 1,600-megawatt coal power plant in Godda, eastern India, by up to half as of Thursday, according to data from Bangladesh's power grid.
By November 7, the group has announced a total stoppage of power deliveries if the payment arrears are not settled, according to a person familiar with the matter. Adani Group had previously warned that the overdue amounts were "unsustainable." As of September, Bangladesh owed the company around $800 million.
Muhammad Fouzul Kabir Khan, the chief energy advisor to the transitional government in Bangladesh led by Nobel laureate Muhammad Yunus, expressed surprise and disappointment at the decision to the Financial Times. Khan disputed the debt claimed by Adani, stating that the government paid about $100 million in October and opened a letter of credit for $170 million, bringing the debt down to approximately $700 million.
The dispute with the influential Indian tycoon, Asia's second-wealthiest individual, highlights Bangladesh's economic vulnerabilities, which came to light following the dramatic ousting of Prime Minister Sheikh Hasina by student protests in August. The turmoil impacted the country's crucial textile sector, which heavily relies on expensive fuel and raw material imports.
Despite Adani's cuts, Khan stated that Bangladesh is "managing" and has activated more costly power generation plants with liquid fuels. However, these measures increase the cost of electricity generation, while the country also relies on coal-based energy to ensure supply. The agreement with Adani, made during Indian Prime Minister Narendra Modi's visit to Dhaka in 2015, has been criticized by activists for burdening Bangladesh with high import costs.
The Yunus-led government has labeled contracts from Hasina's 15-year tenure as opaque and expensive and has commissioned an expert panel to review them. Adani Group has not commented so far, but recently stated that the costs of their power deliveries for Bangladesh are highly competitive compared to other coal plants. Modern Financial Markets Data
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