The Indian company close to Prime Minister Narendra Modi had already reduced supply and is now demanding the balance of $850 million. Bangladesh has major difficulties with payments abroad due to a shortage of foreign currency, but the interim government wants to review the terms of the agreement with India because it imposes too high tariffs.
New Delhi (/Agencies) – The Adani group has decided to suspend energy supplies to Bangladesh if it does not pay a debt of 850 million dollars by November 7. In fact, already in September the Indian company of billionaire Gautam Adani – close to Prime Minister Narendra Modi – had informed Bangladesh that the pending payments were becoming unsustainable and had reduced the electricity supply by half, going from about 1,400 megawatts to just over 700.
The supply is guaranteed by a 2017 agreement, which was signed when the Awami League was in power in Bangladesh. But then costs increased due to the war in Ukraine that began in 2022 (Bangladesh imported fuel from Russia) and the flight of former Prime Minister Sheikh Hasina to India made the situation even worse, raising a series of controversies. Payment difficulties also increased due to the decrease in foreign exchange reserves, which for now are guaranteed thanks to remittances from the diaspora.
“Last month we paid $96 million and this month a letter of credit was opened for another $170 million,” said Muhammad Fouzul Kabir Khan, energy adviser to Bangladesh’s new interim government. According to anonymous sources reported yesterday by Times of Indiathe Bangladesh Power Development Board’s letter of credit was not accepted because it does not comply with the terms of the agreement. “We are trying to make up for the shortage by using other plants,” said Rezaul Karim, chairman of the Bangladesh Power Development Board, when commenting on Adani’s halving of supply.
The 2017 agreement establishes that the Godda plant, in the Indian state of Jharkhand, will supply the minimum amount of electricity necessary to meet the demand of a given region. But in both India and Bangladesh opposition parties had raised several questions about Adani’s involvement and exorbitant prices.
According to sources familiar with the matter, Bangladesh’s caretaker government, led by economist and Nobel Peace Prize laureate Muhammad Yunus, is reviewing the contract with Adani Power, which, compared to other private suppliers, charges tariffs of almost 27%. higher. Last year, the Bangladesh Power Development Board had asked the Indian company to review the deal. An official commented anonymously to the Bangladeshi news agency on that occasion UNB that the main problem was related to excessively high prices.
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