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The escalating financial strain between Adani Group and Bangladesh's interim government, led by Nobel laureate Muhammad Yunus, highlights a complex energy crisis in the country. Adani Group has issued a stern warning to Bangladesh regarding an unpaid debt of $500 million stemming from a major power project, describing the situation as 'unsustainable.' This debt burden, stemming from a contentious agreement with Adani Power to supply coal-generated electricity from the 1,600 MW Godda plant in India, has become a significant challenge for Yunus's administration, which took over after the ousting of former Prime Minister Sheikh Hasina. The interim government, critical of several costly infrastructure deals made under Hasina's leadership, finds itself grappling with the financial repercussions of these agreements.
The situation underscores the broader energy crisis plaguing Bangladesh, where power-related debts have ballooned to $3.7 billion. Muhammad Fouzul Kabir Khan, Yunus's chief energy adviser, has confirmed that Bangladesh owes $492 million out of the $800 million it is in debt to Adani. In response to the mounting financial pressure, the interim government is actively seeking financial aid from international bodies like the World Bank to stabilize the economy. The energy crisis is rooted in Bangladesh's rapid economic growth, which has been hampered by chronic energy shortages, exacerbated by dwindling domestic gas reserves. Critics have argued that the previous administration's practice of bypassing open tenders in infrastructure deals contributed to inefficiencies and corruption, worsening the energy crisis.
Despite the financial strain, Adani Power remains committed to providing reliable energy to Bangladesh, emphasizing its ongoing dialogue with the Bangladesh government. The company has refuted any plans to divert power away from Bangladesh, confirming that its Godda plant is not connected to the Indian grid. The interim government, however, is committed to reviewing past energy deals, aiming to implement competitive bidding and enhance financial oversight. While aiming to maintain balanced relations with both India and China, the government emphasizes the importance of cost-effective and transparent infrastructure agreements going forward. The situation highlights the delicate balancing act faced by the interim government as it navigates financial burdens, energy shortages, and international relations, all while striving to secure a stable and prosperous future for Bangladesh.
Source: 'Unsustainable situation...': Adani Group warns Bangladesh of unpaid $500 million power debt