Bangladesh accuses Adani Power of violating multi-billion-dollar energy agreement: Report

Bangladesh’s interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by failing to disclose tax benefits received by its Godda power plant, central to the deal, according to documents reviewed by Reuters.

The 2017 agreement, signed between Adani Power and Bangladesh’s state-run Power Development Board (BPDB), was intended to supply power from Adani’s coal-fired plant in eastern India. The deal, approved without a tender process under then-Prime Minister Sheikh Hasina, has faced scrutiny for being significantly costlier than Bangladesh’s other coal power agreements. The interim government now seeks to renegotiate the 25-year deal amid payment disputes, with Dhaka reportedly owing Adani hundreds of millions of dollars for supplied energy.

Adani Power has denied allegations of wrongdoing, maintaining it fulfilled all contractual obligations. The company has not addressed claims that it withheld tax benefits, which, if passed on, could save Bangladesh an estimated $28.6 million annually.

Bangladesh’s power minister, Muhammad Fouzul Kabir Khan, stated that the country’s domestic power capacity has reduced its reliance on Adani’s supply. Meanwhile, Nobel laureate Muhammad Yunus, who assumed leadership in August following the ouster of Sheikh Hasina, has formed a panel to review major energy deals from her tenure, including the Adani agreement.

The controversy has been further fueled by the fallout from U.S. prosecutors’ bribery charges against Adani executives in a separate case. Bangladesh plans to leverage these developments in renegotiation efforts. Adani Group has dismissed the U.S. allegations as baseless.

The dispute has escalated as Adani Power halved its supply to Bangladesh in response to payment delays, despite Dhaka recently making its largest monthly payment of $97 million. Adani claims Bangladesh owes $900 million, while BPDB estimates arrears at $650 million, citing foreign currency shortages as a challenge.

Key issues in the dispute include tariff calculations and revisions to indices used in pricing. Arbitration is stipulated to take place in Singapore, though Bangladesh’s next steps may depend on the findings of a court-ordered investigation into alleged irregularities in the original agreement.