A growing standoff between the Bangladesh government and India’s private energy giant, Adani Power, is creating uncertainty in the country’s electricity trade. The dispute stems from a power purchase agreement signed during the previous Awami League government, which the current interim administration is now examining for alleged irregularities.
According to sources familiar with the matter, the interim government established a high-level committee tasked with reviewing contracts made in the energy sector during the previous administration. The committee’s preliminary report points to significant discrepancies and potential corruption in agreements with several companies, including Adani Power. The report suggests that these contracts could potentially harm Bangladesh financially. The committee plans to submit its final findings by January, after gathering additional data.
The situation has led to a tense back-and-forth between the government and Adani. While legal experts warn that cancelling such contracts is not straightforward, the government has indicated its intent to explore avenues for unilateral termination if irregularities are confirmed. “Contract annulment requires thorough legal and financial analysis. Premature action could backfire, potentially causing far greater losses than the existing disputes,” said senior advocate Dr. Shahdeen Malik.
Meanwhile, Adani Power has taken steps in India to secure the ability to sell electricity domestically, signaling that the company could redirect its production away from Bangladesh if payments are not received. The company has also repeatedly warned that Bangladesh could face power interruptions if dues are not settled promptly. Despite this, the interim government has continued paying Adani’s outstanding dues, ensuring a steady supply of electricity to the national grid.
The most recent development came on November 10, when Adani sent a letter to the Bangladesh Power Development Board (BPDB), warning that unpaid dues could force the company to suspend electricity supply from November 11. In the letter, Adani’s Vice Chairman, Avinash Anurag, claimed that BPDB had failed to pay $496 million, of which $262 million is recognized by BPDB as undisputed dues. According to the Power Purchase Agreement (PPA) signed on November 5, 2017, Adani reserves the right to suspend supply if payments are not made on time.
Sources at BPDB confirmed that partial payments have been made to avoid disruptions. By November 10, BPDB had paid $30 million out of a targeted $100 million installment, while Adani continues supplying electricity under the agreement. Adani also emphasized that capacity charges-fees for maintaining reliable generation capacity-remain payable even if electricity supply is temporarily halted.
Dr. Fawzul Kabir, an electricity advisor involved in reviewing the interim report, said: “If the committee confirms any irregularities in the Adani contract, we will not hesitate to recommend cancellation. Most contracts explicitly affirm that they are free from corruption, but if that condition is violated, the government is entitled to terminate the deal.”
The legal ramifications, however, are complex. Dr. Shahdeen Malik explained, “While there is sufficient evidence to consider annulment, Adani could take the matter to an international court and claim up to $5 billion in damages. Any premature cancellation could lead to losses ten or twenty times higher than the current financial exposure. Our legal advice is to pursue termination only if we have a very strong probability of success-otherwise, we risk significant setbacks.”
The interim government formed the high-level committee in September of last year under the leadership of retired Justice Moinul Islam Chowdhury. Other members include BUET’s Vice Chancellor (Acting) Abdul Hasib Chowdhury, former KPMG Bangladesh COO Ali Ashraf, former World Bank chief economist Dr. Zahid Hossain, University of London Law Faculty Professor Moshtaq Hossain Khan, and senior advocate Dr. Shahdeen Malik. The committee submitted an interim report in the first week of this month, with the full report scheduled for January.
Adani Power has expressed repeated concerns regarding BPDB’s payment schedule. In a September 27 letter addressed to Professor Dr. Muhammad Yunus, Adani’s Chairman Gautam Adani noted that BPDB had promised to clear all outstanding dues within the month but failed to do so. The company has indicated that, under the PPA, any delay in payment could entitle it to suspend supply while still charging capacity fees.
Experts emphasize that this dispute highlights broader vulnerabilities in Bangladesh’s energy procurement practices. According to Dr. Kabir, “The Adani contract review is part of a wider effort to ensure transparency and accountability in the power sector. While there is no desire to disrupt electricity supply, safeguarding public funds is essential. Legal compliance and prompt payment are equally crucial.”
The ongoing standoff has created uncertainty for bilateral energy trade and raised concerns among investors and industry stakeholders. Market analysts suggest that while the government is committed to honoring undisputed dues, the potential for disputes over contract irregularities could delay future foreign investment in Bangladesh’s energy sector.
“The Adani case is emblematic of the challenges emerging markets face when revisiting legacy contracts. There is a delicate balance between enforcing accountability and maintaining investor confidence,” said energy economist Dr. Farida Rahman. She added, “Bangladesh must navigate this carefully, ensuring legal rigor without disrupting supply or exposing itself to costly international arbitration.”
In conclusion, the Bangladesh government and Adani Power remain locked in a tense negotiation, with partial payments keeping electricity flowing while legal and financial reviews continue. The interim committee’s full report in January will likely determine the next steps, with the potential to reshape Bangladesh’s approach to foreign energy contracts and transparency in the sector. For now, both parties continue to manage a precarious balance between contractual obligations, financial liability, and the imperative of uninterrupted power supply.
