Bangladesh is reportedly pushing to renegotiate significantly lower electricity prices with the Adani Group, as the government grapples with mounting costs of subsidizing expensive power for its citizens. This effort coincides with ongoing allegations against Adani Group by US officials over a $265 million bribery scheme, which the conglomerate has denied.
The deal in question is a 25-year agreement signed in 2017 between Bangladesh and Adani Power for coal-fired electricity from a $2 billion plant in eastern India. While the agreement currently supplies around 10% of Bangladesh’s power needs, the terms have drawn criticism for being disproportionately expensive.
Adani charged 14.02 taka per unit in FY 2022-23, significantly higher than the national average of 8.77 taka per unit.
Although rates dropped to 12 taka per unit in 2023-24, they remain well above the retail price of 8.95 taka, burdening the government with a 320 billion taka subsidy bill.
Bangladesh’s energy minister has confirmed that the deal is under investigation, with results expected by February 2025. Calls to renegotiate or potentially cancel the agreement depend on findings of irregularities such as corruption or anomalies in the contract.
Muhammad Fouzul Kabir Khan, an adviser on power and energy, suggested renegotiation to address unfair terms but emphasized cancellation only in cases of proven corruption. He asserted Bangladesh’s ability to meet energy demands domestically, citing idle plants or those operating below capacity due to fuel shortages or operational issues.
“When Adani cut their supply to half, nothing happened. We will not allow any power producer to blackmail us,” Khan stated, signaling the government’s resolve.
Political and Financial Backdrop
The situation unfolds amid political instability in Bangladesh, with a recent overthrow of the government led by former Prime Minister Sheikh Hasina. Additionally, Adani’s decision to halve its electricity supply due to delayed payments has added to the strain.
As Bangladesh reviews its energy strategy, the outcome of the investigation and negotiations with Adani could set a precedent for future power deals, balancing affordability with sustainability.
