Adani Power faces $800 million in unpaid dues from Bangladesh amid political turmoil

Billionaire Gautam Adani’s power unit, Adani Power Ltd., is owed as much as $800 million by Bangladesh for electricity supplied from its coal-fired plant in the Godda district of Jharkhand, India. The dues come as Bangladesh faces economic challenges, including weeks of violent protests that led to the ousting of the previous administration. Bangladesh Bank’s newly-appointed Governor, Ahsan H. Mansur, told Bloomberg that failure to pay could result in a halt of electricity supply, although Adani Power has no immediate plans to cut supply.

Adani Power is reportedly in talks with Bangladesh’s interim government to resolve the issue. However, the delayed payments put pressure on Adani Power from lenders and coal suppliers. The situation highlights the financial and geopolitical risks faced by the Adani Group as it expands its operations in neighbouring countries like Bangladesh, Sri Lanka, Bhutan, and Nepal.

The Godda power plant began commercial operations in April last year, with Gautam Adani previously praising former Bangladeshi Prime Minister Sheikh Hasina’s vision for the project. Other Indian companies, including state-owned NTPC Ltd. and PTC India Ltd., also supply electricity to Bangladesh, but it’s unclear if they face similar payment issues.

Bangladesh is currently dealing with an economic crisis, with total arrears amounting to $2 billion, including urgent payments to airlines. The country’s foreign exchange reserves have dwindled to $20.5 billion, covering only about three months of imports. The interim government is seeking additional loans from the International Monetary Fund, beyond an existing $4.7-billion program, to manage its financial woes. “The message is that we need money,” Mansur said, emphasizing the urgency of clearing all arrears.