The Adani Group has initiated power supply reductions to Bangladesh, escalating tensions over mounting unpaid bills that threaten to completely halt electricity exports to the South Asian nation. The Indian conglomerate began reducing cross-border power flows by up to 50% from its 1,600-megawatt Godda coal-fired facility in eastern India.
The infrastructure giant, led by billionaire Gautam Adani, has issued a stern 7 November deadline for Bangladesh to address approximately £800 million in overdue payments or face a complete power cut-off. This dramatic move highlights the growing financial strain between the two parties, with Adani executives previously declaring the payment situation “unsustainable”.
Bangladesh’s interim government, headed by Nobel laureate Muhammad Yunus, has expressed both surprise and disappointment at Adani’s decision. The government’s top energy adviser, Muhammad Fouzul Kabir Khan, maintains that Bangladesh has made significant efforts to reduce its debt, including a £100 million payment in October and establishing a £170 million letter of credit.
The dispute underscores deeper economic challenges facing Bangladesh following the ousting of former Prime Minister Sheikh Hasina by student protesters in August. The nation’s critical garments sector has faced disruption, while costly fuel and commodity imports continue to strain the economy. The interim government has sought an additional £3 billion from the IMF, supplementing a previous £4.5 billion bailout package.
Despite the power reduction, Bangladesh claims to be managing the situation by activating more expensive power generation facilities using diesel and furnace oil. The government is also exploring legal options, noting that Adani remains contractually obligated to fulfil its commitments.
The power supply agreement, established during Indian Prime Minister Narendra Modi’s 2015 visit to Dhaka, has faced criticism from activists who question the economic viability of importing power at such high costs. The interim government has launched an expert committee to review energy agreements signed during Hasina’s 15-year tenure, with findings expected within two weeks.
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