Bangladesh clears $437 million dues months after claiming it had the ‘capacity’ to cope without Adani Power, supply fully restored amid improved financial assurances
In a significant development for regional energy cooperation, Bangladesh has cleared its pending dues amounting to USD 437 million to Adani Power, marking the single largest payment made under the bilateral power supply agreement.
Sources familiar with the matter confirmed that payments include outstanding bills, carrying costs, and charges linked to the power purchase agreement (PPA) signed between Bangladesh and the Indian conglomerate in 2017.
The development comes after months of uncertainty in power supply from Adani’s 1,600 MW Godda power plant in Jharkhand, which supplies electricity exclusively to Bangladesh. Supply had been reduced last year due to payment delays, a consequence of Bangladesh’s worsening financial situation amid rising energy import costs following the Russia-Ukraine conflict and domestic political instability.
However, according to officials aware of the developments, Bangladesh has now regularised its payments over the past few months, consistently paying USD 90-100 million per month. The June payment of USD 437 million has effectively cleared all outstanding dues. As an added financial safeguard, Bangladesh has implemented Letters of Credit (LCs) covering about two months’ worth of billing and extended sovereign guarantees for all dues, providing additional security to Adani Power.
Earlier last year, Bangladesh’s Power Minister Muhammad Fouzul Kabir Khan told Reuters that the country could cope without Adani’s power supply, citing increased domestic generation capacity, though he admitted not all domestic units were operational. Despite that claim, mounting power shortages and strained infrastructure appear to have forced a course correction.
With financial issues resolved, Bangladesh has requested Adani Power to resume full electricity supply from both units of the Godda plant, as per the Bangladesh Power Development Board’s (BPDB) schedule. The plant meets approximately 10% of Bangladesh’s electricity demand.
Concerns regarding the PPA, which had attracted criticism from opposition leaders and activists in both countries, were also subject to review by Bangladeshi authorities. Sources stated that no adverse findings emerged from these investigations, with officials reaffirming the project’s importance for Bangladesh’s energy security. Data from BPDB indicates that electricity supplied by Adani Power is among the most competitively priced sources available to Bangladesh, although critics have previously questioned the broader terms of the agreement.
Adani Power has also undertaken corporate restructuring to merge the Godda unit with its parent operations, aimed at improving financial and operational efficiency. Industry analysts suggest that these developments may bolster Adani Power’s credit rating, with expectations of an upgrade from AA to AA+, potentially lowering borrowing costs for the company.
The 2017 power agreement has often been the subject of political debate, with critics raising concerns over pricing, transparency, and dependence on imported coal-based power. Proponents argue that the Godda plant has provided Bangladesh with reliable and competitively priced electricity, helping to address chronic power shortages.
The recent financial settlement reflects Bangladesh’s efforts to stabilise its energy sector and fulfil its contractual obligations. With payments back on track and supply fully restored, stakeholders on both sides are cautiously optimistic about the stability of the arrangement moving forward.
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