Bangladesh's crisis leaves Adani Power chasing $800 million in dues

Billionaire Gautam Adani’s power generation unit, Adani Power Ltd, is grappling with unpaid dues amounting to $800 million from Bangladesh, reported Bloomberg. The outstanding payments come at a time when the South Asian nation is reeling from weeks of violent protests that resulted in hundreds of deaths and the ousting of the previous administration earlier this month.

Bangladesh Bank’s newly-appointed Governor Ahsan H Mansur confirmed the substantial debt owed to Adani Power, which operates a coal-fired plant in Godda, Jharkhand, supplying electricity to Bangladesh. In an interview with Bloomberg, Mansur stressed the critical nature of these payments: “If we don’t pay them, they will stop providing electricity.”

 

Although Adani Power has not yet threatened to cut off the electricity supply, insiders familiar with the company’s internal discussions have indicated that continued non-payment could force the company into difficult decisions. 

The power producer is currently in discussions with Bangladesh’s interim government to resolve the issue, according to sources.

The Adani Group has yet to issue an official comment on the situation.

 

Geopolitical and financial risks
 

The delay in payments highlights the financial and geopolitical risks that Adani Group faces as it continues to expand its global presence, particularly in India’s neighbouring countries, including Sri Lanka, Bhutan, and Nepal. This expansion often aligns with Indian Prime Minister Narendra Modi’s broader policy goals in the region.

The Godda Thermal Power Station, which began commercial operations in April last year, was inaugurated with significant fanfare, with Gautam Adani lauding the vision of Bangladesh’s then Prime Minister Sheikh Hasina. However, the current financial turmoil raises questions about the stability of such international ventures.

Adani Power is not the only Indian entity supplying electricity to Bangladesh; state-owned firms like NTPC Ltd and PTC India Ltd also provide power to the country. It remains unclear whether these companies are also facing unpaid dues.

Economic turmoil and interim governance
 

The economic crisis in Bangladesh has deepened, with overall arrears reportedly reaching $2 billion. Earlier this month, Bangladesh’s military leadership played a key role in establishing an interim government to quell the deadly protests that forced Hasina to flee the country. Despite this, the country’s financial woes persist, including urgent dues to airlines and other sectors.

Bangladesh’s foreign exchange reserves are dwindling, with just $20.5 billion remaining as of July 31, enough to cover only three months of imports. The interim government is now seeking additional loans from the International Monetary Fund (IMF) to help navigate these economic challenges, beyond the $4.7-billion programme already in place.

“The message is that we need money,” Mansur said, adding, “We want to clear all the arrears.”