Adani wants to cut off power supplies to Bangladesh over unpaid bill
The Indian company close to Prime Minister Narendra Modi already has reduced supply and is now asking for payment of US$ 850 million. Bangladesh is struggling with foreign payments due to a shortage of foreign currency, while the caretaker government wants to revise the terms of the deal with India because its prices are too high.
New Delhi (AsiaNews/Agencies) – The Adani group plans to cut energy supplies to Bangladesh if the latter does not settle its debt of US$ 850 million by 7 November.
In September, the Indian company run by billionaire Gautam Adani, who has close ties to Indian Prime Minister Narendra Modi, told Bangladesh that outstanding payments were becoming unsustainable and halved power supply, from about 1,400 megawatts to just over 700.
Power is guaranteed under a 2017 agreement, signed when the Awami League was in power in Bangladesh. However, costs rose due to the outbreak of war in Ukraine in 2022 (Bangladesh imported fuel from Russia) and the flight of former Prime Minister Sheikh Hasina to India further worsened the situation, while other controversies followed.
Difficulties in payments have also increased due to a drop in foreign currency reserves, for now guaranteed thanks to remittances from the diaspora.
"Last month, we cleared million, and this month, a letter of credit has been opened for an additional 0 million," said Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government.
According to anonymous sources cited yesterday by the Times of India, the Bangladesh Power Development Board's letter of credit was not accepted because it does not meet the terms of the agreement.
"We are trying to meet the gap by running other plants," said Rezaul Karim, chairman of the Bangladesh Power Development Board, speaking about supply cuts by Adani.
Under the 2017 agreement, the Godda plant, in the Indian state of Jharkhand, provides a minimum amount of electricity needed to meet demand in a given region.
In both India and Bangladesh, opposition parties raised several questions about Adani's involvement and exorbitant prices.
According to sources familiar with the matter, Bangladesh's caretaker government, led by economist and Nobel Peace Prize laureate Muhammad Yunus, is reviewing the contract with Adani Power, which, compared to other private providers, charges rates that are almost 27 per cent higher.
Already last year, the Bangladesh Power Development Board had asked the Indian company to revise the agreement.
An unidentified official told the Bangladeshi news agency UNB that high prices are the main bone of contention.
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27/08/2008
