Introduction
The recent coup in Bangladesh has sent shockwaves not only throughout the country but also across borders to India. The impacts are particularly profound for Gautam Adani, one of India’s wealthiest industrialists, who stands to suffer substantial losses. While Adani’s businesses are among the most affected, he is not alone; four other Indian companies are also poised to experience severe financial repercussions. In total, it is estimated that these five companies, including Adani’s, could face losses exceeding $1 billion or approximately ₹8,400 crores.
The Financial Impact on Adani
Among the companies in distress, Adani Power is facing the brunt of the financial fallout. Reports suggest that Bangladesh owes Adani Power a staggering $800 million in payments for electricity supplied, which translates to over ₹6,700 crores. To facilitate this supply, Adani established a 1.6-gigawatt coal-based power plant in Godda, Jharkhand, designed specifically to deliver energy through a dedicated transmission corridor.
The immediate government in Bangladesh had been criticized for its high payments to Adani for electricity, a situation now complicated by the political upheaval.
Outstanding Dues of Other Companies
It’s not just Adani Power that finds itself in this predicament. SEIL Energy India, another significant player, is also facing challenges. The Bangladesh government had struck a deal with SEIL Energy India for the supply of 250 megawatts of electricity, resulting in a pending payment of $150 million.
Additionally, the state-owned entity NTPC is part of this group of companies dealing with payment issues. NTPC supplies 740 megawatts of power to Bangladesh and is owed $80 million for its services.
Companies Facing Payment Issues
Other notable companies in this situation include PTC India, which, in collaboration with West Bengal State Electricity Distribution Company, supplies 250 megawatts to the Bangladesh Power Development Board. As per the recent figures, PTC India has around $79 million outstanding after receiving $46 million by August 25. Furthermore, the Power Grid Corporation of India is also awaiting $20 million from Bangladesh.
The Root of the Problem
Government officials have voiced concerns regarding payment-related issues that some companies are encountering, which are often linked to coal procurement matters. Collectively, these businesses face an outstanding balance exceeding $1 billion. Despite this, the electricity supply to Bangladesh has not been halted, attributed to the strong bilateral relations between the two countries.
However, it remains uncertain how long this arrangement can be maintained, given that companies are accountable to their stakeholders.
Challenges in Maintaining Power Supply
There are reports indicating that Adani Power has acknowledged the payment issues, although no specific figures have been disclosed. A representative from one of the power companies stated that the payment issue with Bangladesh needs to be resolved promptly; otherwise, continuing power supply operations may become increasingly difficult. Companies must make advance payments to lenders and suppliers, necessitating adequate capital resources. The Godda plant was launched at full capacity in July 2023, reliant on imported coal for its operations.
As the situation unfolds, it remains critical to observe how Indian power companies navigate these challenges and continue their electricity supply to Bangladesh. The evolving scenario demands strategic decision-making and financial acumen to weather the storm effectively.
