The largest Indian power seller, Adani Power, had severely scaled back electricity exports to Bangladesh, with an outstanding debt of over $800 million cited. The cuts at the 1,600 MW Godda plant in Jharkhand, which were first felt in the distribution of energy in Bangladesh from early August, were initially brought to 1,400-1,500 MW but were subsequently scaled down to as low as 520 MW. Bangladesh has been left with no option but to find ways around this power unrest by discovering other alternative forms of energy and means to help recover the lost power supply to its grid.
Adani Power threatens Bangladesh’s electricity supply as the row over payments between the two escalates. Fuel and good import costs form part of Bangladesh’s financial challenge, but it is fuelled—and worsened by the global energy crisis following the Ukraine conflict. Bangladesh has been acting fast to hasten payments to Adani, which included opening a $170 million letter of credit to administer dues. However, the drastic fall in power supply further suggests the financial pressure facing the organization.
As Bangladesh continues to face economic hardship, its power infrastructure is being stretched ever tighter. An unsatisfactory electricity supply has meant that life and commerce are regularly affected in daily life and business operations, while the assurance of stability regarding the country’s power grid has also been affected. Alternate provision to cater to demand continues to be pursued, and officials have been vocal regarding Bangladesh’s resolve to ensure that no single provider gains greater control over its energy requirements.
Conclusion
The power struggle underlines the challenges a developing country like Bangladesh faces in the handling of imported energy in the event of recessions in the economy. Bangladesh’s fiscal crisis, further exacerbated by political instability, has made the country vulnerable to its partnership on energy with Adani. What Bangladesh does now to strengthen the stability of payment could prove to be a decisive turn in Adani Power’s response and could have implications as well for changes in supply—a lot would depend on how Adani would react to the country’s newfound resolve to manage payments.
Source: Reuters