In a bid to avert a significant power crisis, Bangladesh has significantly increased its payments to Adani Power following the company's decision to reduce electricity supplies by 50% due to an outstanding $800 million bill. Senior officials from the Bangladesh Power Development Board revealed that they have already issued a $170 million letter of credit to the Indian conglomerate. This crucial supplier accounts for approximately 10% of the nation’s electricity needs, derived from its 1600 megawatt coal-fired plant located in eastern India.
Bangladesh Boosts Payments to Adani Amid Power Shortages
Bangladesh Boosts Payments to Adani Amid Power Shortages
Bangladesh attempts to avert a power crisis by increasing payments to India's Adani Power, which recently halved electricity supplies over unpaid debts.
Despite ongoing struggles with payment issues, officials are optimistic about working through the debt crisis, planning to process payments gradually while expressing concerns over the potential suspension of all supplies if the debt is not resolved by November 7. Energy consultant Fouzul Kabir Khan emphasized the Bangladesh government’s commitment to repay and not yield to perceived extortive practices. Power shortages, particularly in rural areas, have become increasingly common, exacerbated by a decrease in foreign currency reserves stemming from political upheaval that culminated in the ousting of the previous government.
The financial distress has prompted the interim government to seek an additional $3 billion loan from the International Monetary Fund (IMF), further complicating negotiations with foreign power suppliers including other Indian firms. To offset supply constraints, Bangladesh is also resuming operations at some gas and oil plants, even as this move raises costs during a challenging economic period. Meanwhile, the nation is looking to diversify its energy portfolio with the anticipated commissioning of its first nuclear power plant later this year, aimed at stabilizing energy supply amidst ongoing pressure in electricity generation.
The financial distress has prompted the interim government to seek an additional $3 billion loan from the International Monetary Fund (IMF), further complicating negotiations with foreign power suppliers including other Indian firms. To offset supply constraints, Bangladesh is also resuming operations at some gas and oil plants, even as this move raises costs during a challenging economic period. Meanwhile, the nation is looking to diversify its energy portfolio with the anticipated commissioning of its first nuclear power plant later this year, aimed at stabilizing energy supply amidst ongoing pressure in electricity generation.
