Sun Nov 03 13:33:57 UTC 2024: ## Bangladesh Faces Deeper Energy Crisis as Adani Power Cuts Supply Over Unpaid Dues

**Dhaka, Bangladesh** – Bangladesh is facing a deepening energy crisis as Adani Power Jharkhand Limited (APJL), a subsidiary of Adani Powr, has halved its power supply to the country due to $846 million in unpaid dues. The move, which began Thursday night, has resulted in a power shortfall exceeding 1,600 megawatts (MW), impacting industries, businesses, and households.

The reduction comes at a particularly challenging time for Bangladesh, which is already grappling with a severe financial crisis marked by inflation, currency devaluation, and a foreign exchange shortage. The country relies heavily on imported energy resources, but rising global energy prices have strained its foreign currency reserves.

The Adani plant, which normally provides 1,496 MW, is now operating at half capacity, producing only 700 MW. The Bangladesh Power Development Board (PDB) has been working to settle portions of its dues, but escalating coal prices, tied to the Indonesian and Australian Newcastle indices, have made this difficult.

The PDB’s ability to fulfill its financial commitments has been further hampered by the dollar shortage. Despite the Bangladesh Krishi Bank agreeing to issue a $170.03 million letter of credit to Adani Power, the bank has been unable to do so due to limited dollar availability.

The power supply cut exacerbates Bangladesh’s existing economic woes. The dollar shortage is impacting the country’s ability to secure essential imports like fuel and food, leading to rising inflation and making everyday essentials more expensive. The energy crisis is likely to have a significant impact on key industries like manufacturing and textile production, potentially affecting exports, a crucial source of revenue for Bangladesh.

The development highlights the vulnerability of Bangladesh’s economy, which is facing a confluence of challenges including global price hikes, supply chain disruptions, and reduced export earnings. The Adani situation raises concerns about the long-term stability of Bangladesh’s energy agreements, as other suppliers may follow suit if financial assurances are not met.

As Bangladesh navigates this impasse, the government faces the urgent task of finding solutions to address both the energy crisis and the broader financial challenges. Failure to do so could have significant consequences for the country’s economic growth and social stability.

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