Bangladesh Seeks to Renegotiate Adani power Deal if Court Doesn't Cancel

03 Dec 2024 CW Team

Bangladesh seeks a significant reduction in prices under a power purchase agreement with India's Adani Group, unless the deal is annulled by a court, which has called for an investigation into the 25-year contract, according to Bangladesh's de facto energy minister in an interview with Reuters on Sunday.

Adani Group founder Gautam Adani is already facing allegations from US authorities regarding his involvement in a $265 million bribery scheme in India, charges he has denied. Meanwhile, one Indian state is reviewing its power deal with the group, and France's TotalEnergies has paused its investments.

In Bangladesh, following an appeal from a lawyer requesting the potential cancellation of the power deal, the High Court last week ordered the formation of a committee of experts to examine the contract under which Adani provides power from a $2 billion coal-fired plant in eastern India. The investigation is expected to conclude by February, when the court will issue its order.

The deal, signed in 2017 by Adani and a government entity under the administration of Prime Minister Sheikh Hasina, who was ousted this year following a popular uprising and corruption allegations, initiated supply from the 1,600 megawatt plant last year. The plant, which uses costly imported coal, now meets about a tenth of Bangladesh's power consumption.

Bangladesh's power and energy adviser, Muhammad Fouzul Kabir Khan, stated in an interview that the contract should be renegotiated in case of anomalies, but cancellation should only occur in the event of irregularities such as corruption or bribery. He emphasized that any actions would be based on the findings of the court-ordered investigations.

He also mentioned that certain issues, like Bangladesh not benefiting from some Indian tax exemptions related to the power plant, have already been raised with Adani and could form part of the basis for a potential renegotiation of the deal.

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