Bangladesh to hire global law firm to review Adani, other power deals

Bangladesh said that external legal expertise is essential for a detailed review, which may lead to the renegotiation or even termination of certain contracts, including Adani Power

A government-appointed committee in Bangladesh has proposed engaging a global legal firm to facilitate an in-depth and transparent investigation into power generation contracts signed during former prime minister Sheikh Hasina's tenure, according to a Bloomberg report. 

 

Among the agreements under scrutiny is one with India’s Adani Power. Justice Moyeenul Islam Chowdhury, leading the committee, has sought additional time to evaluate contracts spanning from 2009 to 2024, including both solicited and unsolicited agreements, according to a senior official familiar with the matter.

 

“External expertise will be crucial for conducting a comprehensive investigation that could potentially lead to the renegotiation or cancellation of certain agreements in line with international arbitration standards,” the report quoted an official as saying.

 

 

The official noted that external legal expertise is essential for a detailed review, which may lead to the renegotiation or even termination of certain contracts while adhering to international arbitration standards. Several contracts have been criticised for their financial implications, environmental impact, and questions over long-term viability.

 

Adani Power’s Bangladesh contracts under the scanner 

Adani Power, operating a dedicated 1,600 MW Godda plant in India’s Jharkhand state, began supplying electricity to Bangladesh in 2022. However, the company recently cut the supply by more than 60 per cent, citing $800 million in unpaid bills. The Bangladesh Power Development Board has acknowledged the challenge of settling the total dues in one go, but plans to pay up to $100 million monthly to Adani Power.

 

Gautam Adani, chairman of the Adani Group, is facing charges in the United States related to a $265 million bribery scheme allegedly designed to influence Indian officials. This development has raised questions about the group’s global operations, which span industries from ports to agriculture and boast a valuation of $142 billion.

 

In addition to the Adani Power agreement, the committee will assess a joint venture with a Chinese firm that constructed a 1,320 MW coal-fired power plant in Bangladesh and six other contracts with local companies. Last month, it was reported that Bangladesh was reviewing Adani Power's contract, as the rates charged were nearly 27 per cent higher than those of India’s other private power producers.

 

Focus on Adani power plant contracts in Bangladesh 

The Bangladesh government-appointed committee is currently scrutinising several power generation agreements, including the Adani Godda coal-fired power plant (1,234.4 MW). Other plants under review include the Payra coal-fired plant (1,320 MW), Bashkhali coal-fired plant (612 MW), Ashuganj gas plant (195 MW), and multiple Meghnaghat plants with varying capacities: 583 MW (dual fuel), 335 MW (dual fuel), and 584 MW (gas/RLNG).

 

Adani Power’s role in regional energy infrastructure 

Adani Power Limited, a leading private thermal power producer in India, has an installed capacity of 15,250 MW across nine strategically located plants. These facilities span states such as Gujarat, Maharashtra, Rajasthan, Karnataka, Chhattisgarh, Madhya Pradesh, and Jharkhand, playing a critical role in bolstering India’s energy sector.

 

Godda Plant’s operations and export impact 

In March 2019, the Indian government designated the Godda plant as a Special Economic Zone. It became fully operational between April and June 2023 and now supplies 7–10 per cent of Bangladesh’s base load electricity.

 

During the 2023-24 financial year, the plant exported approximately 7,508 million units of electricity to Bangladesh, making up nearly 63 per cent of India’s total power exports to the neighbouring country, which amounted to 11,934 million units. This significant contribution underscores the plant’s centrality in the bilateral energy relationship.

 

Bangladesh’s financial struggles 

Bangladesh's economic difficulties, exacerbated by rising import costs since Russia’s 2022 invasion of Ukraine, have hindered its ability to pay for energy imports. The political upheaval following Sheikh Hasina's removal from power in August has added to these challenges. Power from the Adani Group accounts for just under 10 per cent of Bangladesh’s electricity supply, with the northern region being particularly reliant on the Godda plant.

 

The plant is uniquely positioned as the only Indian facility exclusively exporting electricity. However, recent amendments to India’s export regulations allow such facilities to sell power domestically under specific conditions. Despite this, the Godda plant is not yet connected to India’s internal power grid, complicating potential domestic sales.

 

Broader implications for Adani Group 

The committee's review coincides with mounting global scrutiny of the Adani Group. Following charges from the US Department of Justice and the Securities and Exchange Commission, the group’s $3 billion contracts in Kenya were terminated. Bangladesh has also intensified its examination of Adani Power’s agreements.

 

A statement from Bangladesh's chief adviser called for increased Chinese investment in the country following the US elections, highlighting the geopolitical context of the energy deals. As Bangladesh accelerated payments to Adani by opening a $170 million letter of credit, the future of its energy partnerships remains uncertain amid ongoing investigations.

 

(With agency inputs)