New Delhi: Bangladesh is seeking to significantly reduce prices under its power purchase agreement with the Adani Group unless the contract is voided by a court that has called for a probe into the 25-year deal, Reuters has reported.
The decision comes as Adani Group head Gautam Adani faces charges levelled by US authorities of involvement in a $265 million bribery scheme aimed at Indian government officials. The fallout of the November 21 indictment has been significant, with Andhra Pradesh (the state at the centre of the bribery allegations) rethinking the power deal under a new government, France’s TotalEnergies suspending investments, Kenya suspending all infrastructure contracts, and a market value loss of about $ 33 billion for the group’s companies.
Bangladesh’s caretaker government under Mohammad Yunus has formed a review committee that had recommended engaging an investigation agency to examine seven major energy and power projects, including the Adani (Godda) BIFPCL 1234.4 megawatt coal-fired plan.
Recently, the high court of the country ordered an expert committee to review the 2017 deal signed by government of the ousted prime minister Sheikh Hasina with Adani.
Under the deal, Adani Power supplies power generated from a coal plant in Godda of Jharkhand, to Bangladesh. Reuters notes it meets around 10% of Bangladesh’s electricity demand. The deal has invited significant scrutiny.
“Renegotiate in case of anomalies in the contract. Cancel only in case of irregularities such as corruption and bribery…Both based on the findings of the court-ordered investigations,” Muhammad Fouzul Kabir Khan, Bangladesh’s power and energy adviser, said in an interview to Reuters.
He added that Bangladesh has already flagged some issues, such as the country not benefiting from some Indian tax exemptions to the power plant. These could serve as grounds for renegotiation.
In 2023, the Bangladesh Power Development Board (BPD) had written to Adani Power asking for the agreement to be revised.
Khan told Reuters that the US corruption allegations against Adani might not impact the Bangladeshi deal.
“Because the prices are high, the government has to subsidise,” Khan said. “We would like power prices, not only from Adani, to come down below the average retail prices.”
At Tk 14.02 a unit, Adani charged the highest rate for Indian-generated power to Bangladesh in the 2022-23 fiscal year, the report noted.
“When Adani cut their supply to half, nothing happened,” Khan said, stressing that the country has the ability to generate power for itself. “We will not allow any power producer to blackmail us,” he said.
