Bangladesh’s Energy Dilemma: The Adani Power Pact Review

Adani Power: A Crucial Energy Source for Bangladesh

Bangladesh faces a pressing energy challenge as it continues to source electricity from India’s Adani Power. Despite ongoing concerns regarding pricing, the country’s new government appears set to maintain the existing power purchase agreement with Adani. Established in 2017 for 25 years, this deal supplies about 1,600 megawatts (MW) from Adani’s plant in Jharkhand, meeting nearly 10% of Bangladesh’s energy demand.

Reviewing the Terms Amidst Controversies

The newly appointed officials scrutinize past contracts to ensure they adequately protect national interests despite criticism about transparency under previous administrations. The interim government has created a committee to evaluate contracts like the one with Adani, which costs approximately 12 taka ($0.1008) per unit—27% above rates from other Indian private producers and significantly higher than state-owned suppliers. This has raised alarms among domestic critics, including members of the Bangladesh Nationalist Party (BNP), who are urging a comprehensive review of the deal.

The Path Forward: Cooperation or Conflict?

While canceling the Adani power agreement may not be feasible without dire consequences on the energy supply, there is potential for a mutual reduction in tariff rates. However, a legal dispute in international courts could be unsuccessful unless substantial evidence of wrongdoing is presented. The situation remains delicate as Bangladesh grapples with an $800 million debt to Adani, highlighting the complexities of energy procurement amidst financial constraints. The government’s committee’s upcoming decisions can significantly influence future relations with Adani Power and, consequently, the energy landscape in Bangladesh.