Adani Power Cut Worsens Bangladesh’s Energy Crisis

Adani Power Jharkhand Limited (APJL) has issued a warning to Bangladesh regarding a potential reduction in power supply due to unpaid dues of $846 million. The threat of a cut has deepened concerns over the country’s energy crisis, potentially creating a shortage of over 1,600 megawatts (MW). If enforced, the 1,496 MW Adani plant could operate at only 700 MW, which would severely impact the power grid. In response, Bangladesh has promised to address the payment issue, as any disruption would worsen its ongoing struggles with inflation and a currency crisis.

Rising Energy Demand Meets Financial Strain

While Bangladesh faces rapid industrial growth, it heavily depends on imported energy resources to meet rising demands. However, high global energy prices have strained the country’s foreign exchange reserves. Consequently, the Bangladesh Power Development Board (PDB) is struggling to pay for energy imports, including payments to Adani Power. The dollar shortage has further complicated the situation, impacting PDB’s ability to settle dues on time.

Industrial Impact: Disruptions and Delays

The power supply uncertainty has already caused concern within the industrial sector. Manufacturing and textile industries, crucial for exports, are bracing for potential disruptions. Many businesses fear delays, which could lead to a significant drop in output. The ongoing payment dispute with Adani Power threatens to jeopardize Bangladesh’s economic recovery, as exports play a vital role in revenue generation. The PDB’s partial payments have not kept pace with rising energy costs, which are linked to the Indonesian and Australian coal price indices.

Bangladesh’s Energy Crisis: A Growing Concern

The recent warning from Adani Power highlights the fragile state of Bangladesh’s energy sector. As the country battles financial instability, it risks losing access to reliable energy sources. Adani Power’s demand for full capacity payments, even during reduced supply scenarios, has increased the financial burden on PDB. If the dispute is not resolved soon, other energy suppliers may follow Adani’s lead, potentially pushing Bangladesh into deeper economic challenges. In the long term, the country must rethink its energy agreements to ensure stable and affordable power supply.

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