Bangladesh to Review Power Deals Under Sheikh Hasina’s Leadership, Adani Group Scrutinised Over Unpaid Dues
Bangladesh’s interim government, led by Chief Adviser Muhammad Yunus, has initiated a review of power contracts signed during the tenure of former Prime Minister Sheikh Hasina, including those involving India’s Adani Group. A committee has been formed to examine these agreements, with particular scrutiny on the 1234.4 MW coal-fired power plant project by Adani Power, part of the Adani Group.
The National Review Committee, reporting to the Ministry of Power, Energy and Mineral Resources, has been entrusted with the responsibility of scrutinizing the major power production contracts signed between 2009 and 2024 by the Hasina-led government. This includes the controversial Adani (Godda) BIFPCL coal plant deal, among others. The committee’s audit also revolves around projects undertaken by other foreign and local entities, like the coal-fired 1320 MW plant constructed by a Chinese organization. While scrutinizing other deals concluded with Bangladeshi organizations under Hasina’s government,.
The committee has suggested the appointment of an international legal and investigation agency, which would help to review the agreements to find out any sort of legal or financial irregularities. The committee is headed by retired High Court judge Moyeenul Islam Chowdhury and is particularly alarmed by the massive role private companies, such as Adani Group have played in Bangladesh’s power sector.
Adani Group’s Role in Bangladesh’s Power Sector
Adani Group’s role in the power sector of Bangladesh has been under very intensive scrutiny. On November 17, Adani Power (Jharkhand) Ltd signed a 25-year agreement with the Bangladesh Power Development Board to supply 1,496 MW of electricity from the Godda plant in Jharkhand, India. It was for the first time that electricity generated in India was going to be supplied directly to Bangladesh.
Under this pact, Bangladesh has agreed to buy all the electricity generated by the Godda plant. In fiscal 2023-24, the plant exported 7,508 million units of electricity to Bangladesh, which accounted for about 63% of India’s total power exports to Bangladesh, at 11,934 million units. The power trade between the two countries has been growing steadily, with power exports from India to Bangladesh valued at over $1 billion in recent years, making energy an important pillar of the bilateral relationship.
Adani’s Godda thermal plant was built specifically to cater to Bangladesh’s energy needs. However, the plant’s recent involvement in domestic power markets in India has stirred controversy. India’s government amended a law allowing Adani Group to sell power from the Godda plant to domestic buyers. This change has raised questions, particularly after a dispute emerged over unpaid bills for the power supplied by the plant.
Dispute Over Unpaid Dues
This is over dues for electricity supplied from the Godda plant. Adani Group sent a formal letter to Bangladesh in September 2023 with regard to the unpaid bills amounting to USD 800 million. Bangladesh’s state-run Power Development Board (PDB) clarified it had already paid USD 150 million towards the outstanding amount, despite facing financial challenges of its own due to a dollar liquidity crunch.
The Bangladesh government has stated that it is keen to pay the remaining dues, but the delayed payment has once again created discomfort between the two parties. Adding more fuel to the controversy is the new Indian Law Amendment, which was passed recently, allowing Adani Group to sell power inside India. Some even believe that changes were done for this big company at the cost of Bangladesh deal.
This has raised questions about the transparency of the power deals signed during Sheikh Hasina’s government, mainly with big foreign companies such as Adani. At a time when Bangladesh is facing a dollar crunch and cannot pay back energy bills properly, reviewing these deals stands as a crucial issue for the interim government.
Scrutiny of Power Deals and Legal Issues
In an effort to address all the energy sector’s concerns and its sustainability in the long run, the interim government of Bangladesh has taken the review of power contracts as part of a comprehensive move. The committee is to investigate all major power agreements signed during Sheikh Hasina’s time in office, especially those involving foreign companies or large-scale coal projects.
The scrutiny of the Adani deal, in particular, brings to the forefront growing concerns regarding long-term costs and environmental considerations associated with coal-fired power plants. As the transition in global energy continues toward cleaner sources, coal projects have grown more contentious. The review by the committee will likely assess whether these agreements align with Bangladesh’s long-term energy and environmental goals.
While the financial details of the terms agreed upon with Adani Group and other companies are not known completely, the interim government is still committed to all power project sustainability and transparency. The committee will focus particularly on the role of foreign companies in Bangladesh’s energy sector, based on broader geopolitical conditions, as issues of overdue dues are still a problem in many cases.
Conclusion
Reviewing power contracts under the leadership of Sheikh Hasina would be a step forward for Bangladesh in mitigating its concerns over the energy sector and the transparency of its dealings with foreign companies. Scrutinizing such involvement on the part of Adani Group in Bangladesh’s power supply chain and its dispute over unpaid bills once again shed light on how Bangladesh and its neighbors interact in the energy sector.
The review’s outcome may bring about reforms in the country’s energy agreements and influence future power deals with domestic and foreign enterprises. Bangladesh’s future power will thus heavily depend on the transparency and sustainability policy of the interim government for its power sector amid its ongoing energy challenges.
Source: Bangladesh Power Ministry Regulatory Filing