Aug 23, 2024 06:12 PM IST
Weeks of violent protests in Bangladesh left hundreds dead and forced out the previous administration, raking up unpaid dues of $800 million to Adani Power
Billionaire Gautam Adani’s power generating unit has raked up unpaid dues of as much as $800 million from Bangladesh, where weeks of violent protests left hundreds dead and forced out the previous administration this month.
The South Asian country owes this sum to Adani Power Ltd., part of the Indian mining-to-media conglomerate, for electricity supplied by its coal-fired plant in the Godda district of the eastern state of Jharkhand, Bangladesh Bank’s newly-appointed Governor Ahsan H. Mansur told Bloomberg News in an interview.
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“If we don’t pay them, they will stop providing electricity,” he said.
While the power producer has no plans of cutting the supply lines as of now, it will come under pressure from lenders and coal suppliers if the payments remain unpaid, according to people familiar with the internal discussions who spoke on the condition of anonymity.
Adani Power is in talks with Bangladesh’s interim government to sort out this issue, they added.
An Adani Group representative did not immediately respond to an email seeking a comment on the Bangladesh dues.
Geopolitical Risks
The delayed payments underscore the financial and geopolitical risks Adani Group faces as it steadily expands its global footprint, including in India’s neighboring nations of Sri Lanka, Bangladesh, Bhutan and Nepal — often in lockstep with Indian Prime Minister Narendra Modi’s policy priorities.
Gautam Adani shared a post on X in 2022 on the commissioning of the Godda power project and lauding the then Prime Minister Sheikh Hasina’s vision for Bangladesh. The plant started commercial operations in April last year.
Besides Adani Power, a handful of other India state-owned firms, including NTPC Ltd. and PTC India Ltd., also supply electricity to Bangladesh. There’s no clarity on whether those companies have some unpaid dues as well.
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Earlier this month, Bangladesh’s powerful army chief and president helped install an interim government to calm deadly student-led protests that had forced Hasina to flee the country.
But it’s still facing an economic crisis with overall arrears of as much as $2 billion, including dues to airlines that have to be paid immediately, Mansur said.
Its foreign exchange buffer is also eroding, with gross reserves of $20.5 billion as of July 31 that are enough to cover about three months of imports. The interim government is trying to secure more loans from the International Monetary Fund, beyond a $4.7-billion program to tide over these economic hardships.
“The message is that we need money,” Mansur said. “We want to clear all the arrears.”
