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Bangladesh Wants A Do-Over On Its Power Deal With Adani Power, Calling Out Breach Of A Multi-Billion Dollar Agreement
Bangladesh’s interim government is pointing fingers at Adani Power, accusing the energy giant of breaking a multi-billion-dollar agreement by holding back tax benefits linked to a key power plant.
The deal, inked back in 2017, was a big-ticket agreement where Adani Power, owned by billionaire Gautam Adani, promised to supply power from its coal-fired plant in eastern India. But here’s the kicker: the agreement, handed out by then-Prime Minister Sheikh Hasina without a competitive tender, is reportedly costing Bangladesh much more than its other coal power contracts.
Now, Dhaka wants to renegotiate. The country’s power agency says the terms don’t stack up anymore. Adding fuel to the fire, Bangladesh has fallen behind on payments since Adani started supplying power in July 2023, owing hundreds of millions of dollars. Both sides are at odds over the exact amount of the bill.
Muhammad Fouzul Kabir Khan, Bangladesh’s acting power minister, hinted that the country could manage just fine without Adani’s power, given its own domestic capacity (though not all plants are up and running).
The deal also included an implementation agreement addressing tax benefit transfers, but that’s now a sticking point. Bangladesh is reportedly eyeing the recent bribery allegations against Adani Group executives in the U.S. as leverage to revisit the terms. While Adani Power hasn’t been accused of any wrongdoing in Bangladesh, Dhaka seems keen to use the fallout from the U.S. case to push for better terms.
Adani Power, for its part, insists it has met all its obligations and says there’s no sign the deal is being reviewed. A spokesperson declined to comment on the tax benefits or other concerns raised by Bangladesh. Meanwhile, the Adani Group has called the U.S. bribery allegations “baseless.”
Adani Power’s Godda Plant
Adani Power’s Godda plant, built to supply energy exclusively to Bangladesh, runs on imported coal the plant, declared a special economic zone by New Delhi in 2019, enjoys perks like income tax exemptions, but it’s these very incentives that are now at the center of a dispute.
The deal, signed in 2017 between Adani Power and the state-run Bangladesh Power Development Board (BPDB), required Adani to inform Bangladesh about changes in the plant’s tax status and to pass on the benefits of any exemptions.
However, BPDB claims Adani failed to do so, as shown in letters sent in September and October 2024, urging the company to remit the benefits. These letters have reportedly gone unanswered.
According to BPDB officials, if the tax benefits had been passed on, Bangladesh could have saved around 0.35 cents per unit of power. With the Godda plant supplying over 8 billion units in the year ending June 2024, this translates to potential savings of nearly $29 million—a significant amount for a country struggling with energy costs.
Bangladesh’s de facto power minister, Muhammad Fouzul Kabir Khan, has made it clear that these savings will be a key point in future talks with Adani Power.
Hasina, a close ally of Indian Prime Minister Narendra Modi, had been at the helm of Bangladesh for nearly two decades. Critics argue that political considerations, rather than economic prudence, drove the deal. Tim Buckley, director of Australia’s Climate Energy Finance think tank, emphasized that competitive auctions are essential to securing the best price for energy deals—a step that was bypassed in this case.
Adding to the drama, Bangladesh’s current interim government has appointed panels to review major energy deals signed under Hasina’s tenure, including the Adani agreement. A recent white paper submitted to the government spotlighted the U.S. bribery allegations against Adani and called for a thorough review of the deal, labeling it “negotiated hastily.”
Bangladesh and Adani Power Play Hardball
The simmering tension between Bangladesh and Adani Power has escalated into a full-blown standoff, on October 31, Adani Power halved the electricity it supplies from its Godda plant, citing an unresolved payment dispute with Bangladesh.
This move didn’t sit well with Dhaka. The cut came just after Bangladesh had sent a $97 million payment to Adani Power—the highest monthly amount paid this year.
BPDB Chair Md. Rezaul Karim called it a “slap in the face,” given the timing and Bangladesh’s ongoing dollar shortage, which has made paying off foreign debts a constant struggle.
At the heart of the disagreement is the staggering difference in what each side claims is owed.
Adani Power says it’s owed $900 million, while Bangladesh’s power authority, BPDB, pegs the arrears closer to $650 million. On top of that, Bangladesh is pushing for tariff recalculations based on new benchmarks, which could significantly lower costs. Adani, however, has rejected these demands, sticking to the original pricing framework from 2017.
The dispute got worse when Adani Power refused BPDB’s July request to extend a discount it had been offering until May. That discount saved Bangladesh about $13 million, but Adani Power made it clear: no more concessions until the outstanding payments are cleared.
Adding fuel to the fire, Bangladesh says the unit cost of energy from Godda is 55% higher than the average cost of Indian power sold to Dhaka. BPDB officials argue the tariffs need adjustment, especially after one of the pricing indices was revised last year. Adani Power isn’t budging, though, and both parties are gearing up for more talks to find common ground.
The agreements include a clause for arbitration in Singapore if the dispute escalates further, but Bangladesh is also waiting on the outcome of a court-ordered investigation into the deal. Acting power minister Muhammad Fouzul Kabir Khan hinted that the findings could determine the government’s next steps. “If bribery or irregularities are proven, we’ll have to follow the court’s decision—even if that means canceling the deal,” he said.
Adani Group. Smoke Without Fire?
Over the years, the Adani Group has emerged as one of India’s most influential conglomerates, dominating industries from energy to infrastructure. But alongside its meteoric rise, the company has repeatedly found itself at the center of controversies that have raised eyebrows worldwide.
From environmental concerns to allegations of financial impropriety, the phrase “there’s no smoke without fire” seems particularly apt when discussing the Adani empire.
1. The Australian Coal Mine Controversy
One of the most high-profile incidents was the backlash against Adani’s Carmichael coal mine in Queensland, Australia. Dubbed as an environmental catastrophe waiting to happen, the project faced criticism for threatening the Great Barrier Reef and undermining Australia’s climate commitments.
Environmental activists and indigenous groups rallied against the mine, calling out its potential to hasten climate change. The mine also drew scrutiny for its financial feasibility, with allegations that Adani overstated its economic benefits to secure approvals.
2. The U.S. Indictment Scandal
In November 2024, U.S. prosecutors charged Adani executives, along with others, in a $265 million bribery case. While the company denies the allegations and calls them baseless, the indictment has cast a shadow over its global operations.
The charges suggest systemic issues that go beyond isolated incidents, bringing into question the governance and transparency of the conglomerate.
3. Allegations of Stock Manipulation in India
Closer to home, Adani has faced accusations of stock price manipulation and insider trading. In 2023, a damning report by Hindenburg Research accused the Adani Group of using offshore shell companies to inflate stock prices and evade taxes.
Although the company dismissed the report as malicious, it wiped out billions in market value and led to increased regulatory scrutiny.
4. The Sri Lanka Port Deal Dispute
In Sri Lanka, Adani faced allegations of undue political influence when it was awarded a lucrative port project without a competitive bidding process.
Opposition parties in Sri Lanka accused the Indian government of pressuring Colombo to favor Adani, a claim both New Delhi and the conglomerate have denied.
5. Environmental Violations in India
The group’s projects in India have also faced criticism for flouting environmental norms. From coastal destruction caused by its Mundra Port to deforestation linked to its coal mines, Adani’s operations have often been accused of prioritizing profits over sustainability.
A Pattern of Controversy
Individually, these incidents might be dismissed as corporate challenges or politically motivated attacks. However, the recurring nature of the allegations—ranging from environmental violations and financial misconduct to undue political influence—paints a more troubling picture.
Adani Group has consistently denied wrongdoing, claiming it operates within the bounds of the law. But the sheer frequency and scale of these controversies one cant help but ask – Can they all be baseless?
For a conglomerate of its size and influence, transparency and accountability are critical. Until these questions are addressed convincingly, the perception of “smoke without fire” will continue to dog the Adani Group, tarnishing its global ambitions and reputation.
For now, it’s a game of hardball, with each side holding its ground. Whether this power tussle will end in arbitration, renegotiation, or outright cancellation remains to be seen, but it seems that neither side is backing down without a fight.
