Bangladesh has been paying around $400–500 million

A Bangladesh government committee has identified major discrepancies in the power purchase agreement with Adani Power's Godda plant. Payments exceed market rates by around 50%, driven by high coal import costs, transmission fees, and tax pass-throughs. This adds hundreds of millions annually to consumer bills over the 25-year contract.

Deal Background

Signed in 2017 without competitive bidding, the agreement covers a 1,496 MW facility in Jharkhand, India. It supplies over 10% of Bangladesh's electricity, especially vital during peak summer demand. Capacity payments have surged, even when generation falls short due to fuel shortages.

Key Irregularities Uncovered

The probe points to procedural flaws and potential undue influences from the outset. Imported Australian coal, cross-border charges, and fixed obligations inflate tariffs beyond norms. Sector-wide, this has raised power costs by approximately 25%, with long-term overpayments potentially reaching billions.

Recommendations Forward

The panel calls for renegotiating unfair terms, cancelling corrupt arrangements, mandating open tenders for future deals, and creating an independent energy regulator. Legal challenges are feasible, but risks include supply disruptions and widespread blackouts during transition.

Adani's Position

Adani Power emphasises its role in providing reliable, competitive energy despite outstanding dues. The company reports no formal receipt of the probe findings or renegotiation demands. Past payment delays led to temporary output cuts, now stabilised.

Broader Implications

Post-2024 political changes have intensified scrutiny of energy contracts. Bangladesh faces a dilemma: securing immediate power versus enforcing fiscal discipline. Resolving this could set precedents for other import deals, balancing reliability with affordability amid growing demand.