November 4, according to the latest news, India’s former richest man Gautam Adani’s power company is increasing pressure on Bangladesh to recover more than 850 million U.S. dollars in electricity bill arrears. Reports say that Adani Power Company has stopped half of the power supply to Bangladesh and may cut off the power supply to Bangladesh completely from the 7th of this month. Earlier, the Power Development Board (PDB) of Bangladesh failed to settle the arrears by the scheduled time (October 31st). Bangladesh is expediting the payment of arrears of electricity bills, two senior government officials said.
The Background Behind Bangladesh’s Default
Bangladesh lacks coal and other minerals, and has long had inadequate infrastructure in the power sector. In a situation where the demand for electricity is climbing due to rapid economic growth, there is a huge gap in the country’s power supply, and power outages are common. As one of the fastest growing economies in South Asia, the country has been increasing its power capacity to meet the surging demand. For this purpose, the country has partnered with several power companies and international financiers. India’s Adani Power has been exporting electricity to Dhaka, the capital of Bangladesh, through its coal-fired power plant in the eastern Indian state of Jharkhand. However, a combination of factors, such as rising fuel costs, inflation and currency depreciation, has created significant financial pressures. These factors have severely impacted Bangladesh’s ability to meet its energy bills, culminating in an $850 million default.
If Adani Power cuts off supplies completely, it will further increase the risk of blackouts in Bangladesh. India Today also noted that Adani Power’s cuts put additional pressure on a country already grappling with a growing financial and energy crisis. Some industries that depend on a steady supply of electricity, such as manufacturing and textiles, could suffer from this shortage and could affect exports.
The default mainly affects private and international power producers supplying electricity to the national grid in Bangladesh. Given the scale of the default, this situation poses a risk not only to Bangladesh’s energy stability, but also to the financial health of companies with significant investments in the region.
As the country relies heavily on imported energy to meet its needs, and the cost of imports is increasing due to high global energy prices, Bangladesh’s foreign exchange reserves are stretched thin. And the shortage of dollars in Bangladesh has made the problem affect the PDB’s ability to pay its bills on time, and although Bangladesh’s Corish Bank has agreed to issue a letter of credit to Adani Power, it has been delayed due to the limited availability of dollars.
Currently, Bangladesh is scrutinizing its contract with Adani Power as the company is charging Bangladesh nearly 27 percent more than other private power producers in India and 63 percent more than the price of state-owned power plants in India. Dilip Kumar Jha, chief financial officer of Adani Power, said during a quarterly earnings call last week that there was no problem in supplying electricity to Bangladesh.
Gautam Adani’s Role: Strategic Intervention
Gautam Adani, a prominent Indian industrialist, has a unique interest in the matter. With diversified interests in power generation, logistics and infrastructure, the Adani Group has established significant business ties with Bangladesh. In recent years, the Adani Group has signed agreements to supply electricity to Bangladesh, aiming to capitalize on the country’s growing demand for power. When Bangladesh defaulted on these payments, it affected not only local Bangladeshi producers but also regional suppliers, including Adani Enterprises.
By stepping in to resolve Bangladesh’s energy debt, Adani not only safeguarded its business interests, but also positioned itself as a key player in the South Asian energy market. Adani’s intervention highlights a growing trend whereby private sector leaders in India are increasingly playing a quasi-diplomatic role to strengthen regional energy ties.
Bangladesh’s power cut crisis has attracted international attention. The United Nations and other international organizations have called on both sides to resolve their disputes through dialogue and to refrain from resorting to extreme measures in order to ensure continuity of energy supply and the interests of both sides. At the same time, the international community is exploring ways to help Bangladesh improve its energy infrastructure and enhance its energy self-sufficiency.
The case of Bangladesh also highlights an important lesson for developing economies: energy expansion must be balanced with financial prudence. Rapid growth in infrastructure and energy capacity is critical, but without a sustainable financing strategy, these investments can become a financial burden. Bangladesh needs to revisit its energy policy to ensure future resilience while balancing imported energy with indigenous and renewable energy sources. At the same time, Bangladesh also needs to strengthen its energy diversification strategy and reduce its dependence on external energy supplies in order to achieve long-term energy security and economic development.
