The de facto energy minister of Bangladesh told Reuters on Sunday that the country wants to drastically cut prices under a power purchase agreement with India’s troubled Adani Group unless the court cancels it and orders an investigation into the 25-year agreement.
While one Indian state is reviewing a power deal with the Adani Group and France’s TotalEnergies halts its investments, Adani Group founder Gautam Adani is already facing accusations from US authorities that he was involved in a $265 million bribery scheme in India, which he has denied.
The High Court of Bangladesh last week ordered a committee of experts to review the contract under which Adani supplies power from a $2 billion coal-fired plant in eastern India, following an appeal by a lawyer calling for the possible cancellation of the power deal. By February, when the court is supposed to issue its ruling, the investigation should be finished.
The agreement was made in 2017 between Adani and a government agency led by Prime Minister Sheikh Hasina, who was overthrown this year due to widespread corruption allegations and a popular uprising. About a tenth of Bangladesh’s consumption is met by the 1,600 megawatt plant, which began producing last year and uses costly imported coal.
In the event that the contract contains irregularities, renegotiate. In an interview in his office, Muhammad Fouzul Kabir Khan, Bangladesh’s power and energy adviser, stated that cancellations should only be made in the event of irregularities like bribery and corruption.
“Both based on the findings of the court-ordered investigations.”
He said that Adani has already been made aware of certain issues, such as Bangladesh’s inability to take advantage of certain Indian tax breaks for the power plant, and that these issues may serve as the foundation for a deal renegotiation.
A request for comment on the weekend was not immediately answered by Adani. According to Adani Power Ltd.’s most recent annual report, the plant in the Indian state of Jharkhand would “significantly reduce the average cost” for the end user and supply Bangladesh with consistent, dependable, and reasonably priced electricity.
Khan stated that the Bangladeshi deal might not be impacted by the US corruption accusations made against Adani.
In order to guarantee that the investigations “will be acceptable in international negotiations and arbitration,” a separate committee established by Bangladesh’s interim government is already looking into the Adani deal and six other power contracts, according to a government statement.
The state-run Bangladesh Power Development Board reports that Adani charged the highest price for Indian-generated power to Bangladesh in the 2022–2023 fiscal year, at 14.02 taka per unit, while the average price was 8.77 taka ($0.0737).
According to Reuters, Adani’s rate dropped to 12 taka per unit in 2023–2024, but it was still 27% higher than that of other private producers in India and up to 63% higher than that of state-owned plants in the country.
According to Khan, the exchequer pays 320 billion taka in power subsidy bills annually because the retail price in Bangladesh is 8.95 taka per unit.
“Because the prices are high, the government has to subsidise,” stated Khan. “We would like power prices, not only from Adani, to come down below the average retail prices.”
However, he said Bangladesh will continue to pay for the electricity it imports from Adani. Due to a payment delay, the business recently cut its supply in half.
Khan stated that although some plants are currently idle or producing below capacity due to a gas shortage or other factors, Bangladesh has enough domestic capacity to meet its needs.
“When Adani cut their supply to half, nothing happened,” he continued. “We will not allow any power producer to blackmail us.” paraphrase it as though it were news.
