DHAKA: Bangladesh’s de facto energy minister stated on Sunday that the country wants to drastically cut costs under a power purchase agreement with India’s troubled Adani Group unless the court cancels it and orders a probe into the 25-year agreement.
Even as one Indian state examines 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 participated in a $265 million bribery scheme in India, which he has denied.
In Bangladesh, the High Court this week ordered a committee of specialists to review the contract under which Adani delivers power from a $2 billion coal-fired facility in eastern India, following an appeal by a lawyer calling for the possible revocation of the power arrangement. By February, when the court is supposed to issue its order, the probe should be finished.
Adani and a government agency led by Prime Minister Sheikh Hasina, who was overthrown this year due to a public movement and allegations of extensive corruption, signed the agreement in 2017. About a tenth of Bangladesh’s electricity needs are met by the 1,600 megawatt plant, which began producing last year and uses pricey imported coal.
Adani charged the highest price for Indian-generated power in the neighboring country.
If there are any irregularities in the contract, renegotiate. In an interview conducted 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 results of the investigations ordered by the court.” According to him, Adani has already been made aware of certain problems, such as Bangladesh’s inability to take advantage of certain Indian tax breaks for the power plant, and these concerns may serve as the foundation for a deal renegotiation.
A request for comment over the weekend was not immediately answered by Adani. In its most recent annual report, Adani Power Ltd. said that the plant in the Indian state of Jharkhand will “significantly reduce the average cost” for the end user and supply Bangladesh with continuous, dependable, and reasonably priced electricity.
Khan stated that the Bangladeshi agreement might not be affected by the US corruption accusations made against Adani. The Adani deal and six other power contracts are already being investigated by a separate committee that the interim government of Bangladesh established with the goal of making sure the findings “will be acceptable in international negotiations and arbitration,” according to a government statement.
According to the state-run Bangladesh Power Development Board, 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 price dropped to 12 taka per unit in 2023–2024, although it was still 27 percent higher than that of other private producers in India and up to 63 percent higher than that of state-owned plants in the country.
With a retail price of 8.95 taka per unit in Bangladesh, the exchequer must pay 320 billion taka in electricity subsidy bills year, according to Khan.
“The government has to subsidize because the prices are high,” Khan stated. “We want power prices to drop below average retail prices, not just from Adani.” However, he stated that Bangladesh will continue to pay for the electricity it imports from Adani. Due to a payment delay, the company recently cut its supply in half.
Although several plants are currently idle or producing below capacity due to a gas shortage or other factors, Khan claimed that Bangladesh has adequate domestic capacity to meet its needs. “Nothing happened when Adani cut their supply in half,” he claimed. “We refuse to be blackmailed by any power producer.”
