Bangladesh has been struggling to generate dollar revenues to pay for costly essential imports like electricity, coal and oil. Foreign currency reserves fell during months of student-led protests and political turmoil that ousted the Sheikh Hasina government in August.
The interim government which replaced her has sought an additional $3bn loan from the International Monetary Fund (IMF) in addition to its existing $4.7bn bailout package.
Adani’s power deal with Bangladesh, signed in 2015, was one of the many under Sheikh Hasina, which the current interim government has called opaque. A national committee is now reassessing 11 previous deals, including the one with Adani, which has often been criticised as expensive.
Besides Adani Power, other Indian state-owned firms also sell power to Bangladesh, including NTPC Ltd and PTC India Ltd. Power Development Board officials confirmed that partial payments of money owed to other Indian power suppliers are also being made.
Bangladesh is restarting some of the gas-fired and oil-fired power plants to bridge the supply shortfall, although experts say it will increase the cost of power. With winter approaching, power demands on the grid is expected to ease as air conditioners are switched off.
“Other coal-fired plants are running at 50% capacity and the country is unable to buy enough coal owing to the dollar crisis, so it is important to continue readymade power supply from Adani. It is marginally more expensive than local producers but it is a crucial supply,” said Dr Ajaj Hossain, energy expert and a retired professor.
Bangladesh is planning to commission its first nuclear power plant in December to diversify its energy mix. Built with Russian assistance, it is costing $12.65bn, mostly financed by long-term Russian loans.
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