India's Adani Group has warned Bangladesh's new government that its overdue payments for coal power supply from the controversial Godda plant have become "unsustainable".
Bangladesh is facing an economic crisis with overall debt of as much as $2 billion.
Massive electricity problem looming over bangladesh.
Bangladesh also owes ripura State Electricity Corporation Ltd. Rs 100 crore electricity dues.
Power exports accounted for 9.3% of India's total exports to Bangladesh in 2023-24.
Adani Power exported $1-billion electricity power to Bangladesh in 2023-24.
Bangladesh central bank governor said the country is seeking an additional $3 billion from the IMF. Bangladesh owes Adani Power $800 million electricity dues.
Bangladesh Bank Governor Ahsan H. Mansur said, If we don’t pay them(Adani Power), they will stop providing electricity.
The Indian government has recently amended guidelines to allow Adani Power's export-only plant to supply electricity domestically as Bangladesh faces a political crisis.
Adani Power's coal-fired power plant, contracted to sell all its output to Bangladesh, can now supply the domestic market in India after an amendment to India's power export rules, helping the company hedge against political disruptions in Bangladesh.
The Godda coal-power plant, owned by Adani Power, was set up in Jharkhand, India, with the primary purpose of exporting electricity to Bangladesh. The project has been mired in controversy from its inception.
In a major twist, the Modi government recently amended rules allowing Adani to sell power from Godda within India. Critics are calling this a bail-out for Adani, especially after the recent political turmoil in Bangladesh.
The Godda plant enjoyed unprecedented financial benefits, being the only power project of its kind in the world with Special Economic Zone (SEZ) status. This status exempted it from payment of various taxes and duties, significantly boosting Adani's profits.
The construction of the project faced strong opposition from local communities, who were displaced and their livelihoods threatened. Environmental and regulatory rules were bent for the project.
As Bangladesh faces a balance-of-payments crisis, there have been delays in making payments to Adani. The Modi government’s rule change seems to be aimed at cushioning Adani from potential losses.
There’s also a political fallout. The Opposition in India accuses Modi of favouritism, claiming the rule change was designed to benefit Adani at the expense of the peoples of both India and Bangladesh.
The Godda project is unique – coal is transported from Australia to India by ship, then by rail from Odisha to Jharkhand, and the electricity generated is exported to Bangladesh – raising questions about its economic viability.
Bangladesh Power Development Board has not made any payment to Adani Power for eight to nine months.
Adani Power supplies electricity to Bangladesh from its 1,600 MW coal-fired power plant in Jharkhand.
