As political uncertainty continues in Bangladesh after the fall of the Sheikh Hasina government, the country is in debt to five Indian power companies for more than $1 billion which provide electricity to it, reported The Economic Times. The majority of these debts are owed to Adani Power, whose Jharkhand plant delivers electricity to the neighbouring nation. The crisis-ridden nation owes Adani Power close to $800 million, per informed industry executives. The company delivers electricity from its 1.6 GW coal-fired plant located in Godda, Jharkhand, over a dedicated transmission corridor.
Bangladesh Bank’s newly-appointed Governor Ahsan H. Mansur told Bloomberg News in an interview that the country owes $800 million to Adani Power. “If we don’t pay them, they will stop providing electricity,” he said. Adani Power is in talks with Bangladesh’s interim government to sort out this issue, as per reports.
Power Grid Corporation of India, NTPC, PTC India, and SEIL Energy India are among the other businesses owed by the Bangladesh govt for electricity costs. As of 30th June, the country owed over $150 million to SEIL Energy and approximately $80 million to NTPC which delivers about 740 MW from three of its units. SEIL Energy’s power purchase agreement with Bangladesh is for 250 MW. As of the end of March, PTC India owed roughly $84.5 million. The corporation stated that it has $46 million remaining as of 25th August and $79 million is currently due.
Power Grid Corporation of India owed $20 million to Bangladesh. As of 25th August, PTC has received $46 million of the total amount of $84.5 million owed by the nation. PTC India (formerly Power Trading Corporation of India Limited) has been supplying 250 MW of electricity from West Bengal State Electricity Distribution Co. to the Bangladesh Power Development Board since 2013. According to the executives, the companies have continued to deliver power to Bangladesh in spite of the unpaid bills, demonstrating the close affinity between the two countries. They did, however, issue a warning that since the businesses are answerable to their stakeholders, this arrangement cannot last forever.
A government official highlighted, “Some companies have had issues related to payment, with some of it related to coal purchase as well.” An Adani Power representative recognized the problem but would not discuss the outstanding amounts. “We need a solution soon, or else we will find it difficult to continue the supply of power, especially when lenders, suppliers of coal, spares, other commodities, and plant operation-related services need upfront payment,” conveyed an executive of the aforementioned companies.
Imported coal is used at Jharkhand’s Godda plant, which went into full operation in July 2023. When the plant was first put into service, the operator asserted that Bangladesh would benefit from the electricity it produced, as it would save money by eliminating the need for expensive liquid fuel power. Adani has reportedly kept up its power supply in accordance with the Bangladesh Power Development Board’s schedule.
It is important to note that the power companies can divert the electricity meant for export to the local grid, as per a recent amendment by the union govt. Earlier this month, the Ministry of Power announced notable amendments to the Guidelines for Import/Export (Cross Border) of Electricity, 2018. One of the most notable aspects of the amendments includes the provisions to connect dedicated export transmission lines, so that power meant for export can be diverted to Indian grids, in case the buying country fails to schedule power or default on payment obligations under the Power Purchase Agreement (PPA).
Notably, the nation saw widespread protests, severe political unrest and targeted attacks on minorities especially Hindus as former Prime Minister Sheikh Hasina’s previous administration collapsed. Nobel laureate Muhammad Yunus is currently in charge of the nation and working to stabilize the economy.