The Adani agreement, accounting for nearly 10% of Bangladesh's power supply, has been contentious due to electricity costs. According to an official from the Bangladesh Power Development Board, the rate charged by Adani is 27% higher than that of private Indian producers and 63% above Indian state-owned facilities. Despite this, terminating the contract is unlikely, given the critical nature of the power supplied and legal hurdles associated with proving irregularities. Experts suggest renegotiating the tariff as a more viable option.
The review aligns with efforts by Nobel laureate Muhammad Yunus's interim administration to scrutinize prior contracts. Several other energy projects have already been canceled, including a floating LNG terminal planned by Summit Group. Critics argue that the deals, expedited under special laws by the previous government, lacked adequate safeguards for national interests.
Adani Power, for its part, has expressed confidence in the partnership, citing ongoing discussions with Bangladeshi authorities regarding $800 million in unpaid dues. The company maintains that it has fulfilled its contractual obligations and anticipates that Bangladesh will address its commitments.
The political implications of the review are significant, with opposition parties like the BNP backing the initiative. They highlight the necessity of ensuring that energy agreements are both financially and strategically beneficial to the nation. This scrutiny comes amid broader efforts to address Bangladesh’s energy challenges, exacerbated by currency shortages and global market volatility.
The ongoing developments underscore the balancing act required to manage Bangladesh’s energy needs while ensuring fiscal responsibility and public trust. As the review progresses, its outcomes could set a precedent for renegotiating future energy contracts.