Bangladesh warned over ‘unsustainable’ $500mn power debt due to Adani

India’s Adani Group has warned Bangladesh’s new government that its backlog of overdue payments has become “unsustainable.” The country is $500mn behind on dues from a contentious power project.

The overdue power liabilities threaten an early crisis for the interim government of Nobel Peace Prize laureate Muhammad Yunus, who took over last month after student protesters ousted authoritarian prime minister Sheikh Hasina, a close partner of India. Yunus’s government blames opaque, expensive infrastructure deals negotiated under Sheikh Hasina for tipping the country of 170mn into a financial hole.

Among the most contentious was the deal with Adani, owned by Asia’s second-richest man, Gautam Adani, to supply coal power from its 1,600-megawatt Godda plant in India. Adani Power told the Financial Times: “We are in constant dialogue with the Bangladesh government and have appraised them of this unsustainable situation where we are meeting not just our supply commitment but also to our lenders and suppliers despite rising receivables.”

The conglomerate said it would “continue to supply reliable and competitively priced power from our Godda facility to Bangladesh, despite mounting dues”. Muhammad Fouzul Kabir Khan, Yunus’s top energy adviser, told the FT that Bangladesh — which faced total power liabilities of $3.7bn as of the middle of last week — is late on paying $492mn to Adani, to whom it owes as much as $800mn in total.