As Bangladesh is going through a financial crisis, the country requested changes in conditions for repayment of liabilities worth Rs 7,500 crore
Billionaire Gautam Adani-led Adani Power withdrew the deadline imposed by it on the Bangladesh government for repayment of dues worth Rs 7,500 crore. The move has come after nearly five days of negotiations and the company is currently mulling over a Plan-B to deal with the situation, the Mint reported. Additionally, Bangladesh issued a letter of credit worth $170-180 million to the company as an assurance to the company.
“This fresh letter of credit will come on Thursday itself; the government has ensured. This letter of credit will have current validity and will be in line with the power purchase agreement (PPA),” the Mint reported, citing sources.
As Bangladesh is going through a financial crisis, the country requested changes in the conditions for repayment of liabilities. Bangladesh’s owes around $90-95 million on a monthly basis to Adani Power for the export of electricity via its Godda plant located in Jharkhand. However, amidst ongoing economic and political instability, the country has managed to pay only $20-40 million monthly.
Earlier this week, Reuters reported that the company reduced electricity exports to the country from 1,400 MW to around 700-800 MW as the financial troubles hindered the import of coal necessary for power generation.
While the government made partial payment towards the repayment of debt, it has issued a letter of credit for an additional $170 million.
“Last month, we cleared $96 million, and this month, a letter of credit has been opened for an additional $170 million,” Muhammad Fouzul Kabir Khan, the power and energy adviser in the interim Bangladesh government, told Reuters.
The Godda plant set up by the Adani Group supplies 100 per cent of the power generated by it to Bangladesh. The plant, which is India’s first transnational power project, began its operations in June 2023 and has continued to supply electricity to the neighbouring nation. But as economic troubles mounted due to Russia-Ukraine war followed by a political crisis because of student-led protests and the resignation of Prime Minister Sheikh Hasina, the country’s pocket shrank. Additionally, the monetary liabilities led the country to ask for loans from financial institutions like the World Bank for $1.5 billion and the Asian Development Bank and the Japan International Cooperation Agency for $1 billion.