Bangladesh’s newly formed government, led by Nobel Peace Prize laureate Muhammad Yunus, is confronting a $500 million backlog in overdue payments to India’s Adani Group for a controversial power project.
The mounting debt is posing an early crisis for Yunus’s administration, which took office following student protests that ousted former Prime Minister Sheikh Hasina. Yunus’s government attributes the financial strain to opaque and costly infrastructure deals made under Hasina, including the agreement with Adani to supply coal power from its 1,600-megawatt Godda plant in India. Adani Power has warned that the situation is “unsustainable” but continues to supply power despite the accumulating dues.
Bangladesh’s total power liabilities have surged to $3.7 billion, with $492 million owed to Adani alone. The interim government is seeking loans from international lenders, including the World Bank, to stabilize its finances.
Critics argue that Hasina’s efforts to expedite projects facilitated corruption, worsening the country’s energy shortages. In response, Yunus’s administration plans to reintroduce competitive bidding and review previous energy deals to ensure cost-effectiveness and transparency.
Yunus’s government aims to maintain good relations with India and China. The Export-Import Bank of China, for instance, helped finance the Banshkhali power plant built by Bangladesh’s S Alam Group, whose chair is currently under investigation for money laundering.
Despite the financial challenges, Adani has committed to continuing power supplies to Bangladesh.
Source: FT
