Baby Chakraborty, KalimNews, November 5, 2024, Kolkata : Bangladesh is on the brink of a severe power crisis as the Adani Group has issued an ultimatum over unpaid electricity dues amounting to Tk 7,200 crore. The Indian conglomerate, which supplies a significant portion of Bangladesh’s electricity, has warned that if the dues are not cleared by November 7, it will completely halt the power supply, plunging the country into darkness.
The crisis has been brewing since Bangladesh’s new interim government, led by Md. Yunus, assumed power three months ago, following the controversial removal of Prime Minister Sheikh Hasina. Since coming to office, Yunus’ administration has adopted a stance that has increasingly opposed India, leading to tensions between the two neighboring countries. Despite the political shifts, the power supply issue remains rooted in financial matters, with Bangladesh struggling under a mountain of debt, especially for electricity.
A Looming Energy Crisis
Adani Power, a subsidiary of the Adani Group, has been a major supplier of electricity to Bangladesh, particularly from its Godda power plant in Jharkhand. However, Bangladesh has failed to meet its payment obligations, leaving the company in a precarious position. Despite several rounds of negotiations, Adani Power has not received the $850 million (approximately Tk 7,200 crore) it is owed by the Bangladesh Power Development Board (BPDB). The company had demanded a letter of credit (LC) worth $170 million as security for the payment, with an October 31 deadline. When the LC was not provided, Adani Power slashed its electricity supply to Bangladesh by 50%, already causing widespread outages.
Currently, Adani Power is supplying Bangladesh with less than half the required electricity, resulting in significant power shortages across the country. As of now, the supply from Adani Power Jharkhand, Bangladesh’s largest supplier, has been reduced, affecting major power plants like Payra, Rampal, and SS Power, which are also significant contributors to Bangladesh’s energy grid.
The Political Context
The power crisis is compounded by political tensions between India and Bangladesh. Since Yunus’ government took office, there has been a noticeable shift towards anti-India rhetoric, with Yunus portraying himself as a staunch nationalist, frequently opposing India on various issues. His government’s policies have not only escalated tensions between the two countries but have also worsened the economic situation, as Bangladesh is heavily reliant on India for essential resources, including electricity.
The standoff over unpaid dues comes amid Bangladesh’s severe financial crisis, with the country drowning in debt and struggling to meet international financial obligations. Experts suggest that this ongoing power crisis could further destabilize the country, especially as the government grapples with an economic downturn and mounting social unrest.
Adani Group’s Ultimatum
The stakes are high for both sides. If Bangladesh fails to pay the outstanding dues by the November 7 deadline, Adani Power has made it clear that it will cut off the electricity supply entirely, leading to widespread blackouts. The move will further exacerbate the country’s already fragile economic and energy situation, pushing it into deeper darkness.
The Godda power plant is currently Bangladesh’s sole electricity supplier from the Adani Group, making this dispute a matter of national importance. Without a resolution, Bangladesh risks severe power shortages that could cripple daily life and further damage the country’s economy. The potential loss of power supply would not only affect homes and businesses but also halt key industries dependent on electricity, further inflating the already growing frustration among the people.
Interestingly, while Adani Power threatens to pull the plug on its electricity exports, the company itself faces potential losses. With half of its supply to Bangladesh halted, Adani Power Jharkhand had to shut down one of its 800 MW units, a move that could have financial implications for the company as well. The Godda plant’s heavy reliance on Bangladesh as its only buyer for electricity means that any disruption in supply impacts both the Indian company and the Bangladeshi state.
The Way Forward: Will Bangladesh Act in Time?
The next few days will be crucial in determining the course of this unfolding energy crisis. Bangladesh is under significant pressure to resolve the issue before the deadline, but the government’s financial struggles and its strained relationship with India complicate matters. Analysts warn that the situation could escalate into a full-blown crisis, affecting millions of lives and putting further strain on Bangladesh’s economy.
For now, Bangladesh must act quickly to settle the debt with Adani Power and restore full electricity supply, or face the dire consequences of prolonged power shortages that could cripple the nation.