The independent National Review Committee, headed by retired judge Moinul Islam Chowdhury, recently submitted an interim assessment pointing to what it described as “massive governance failure” and possible corruption in the broader power sector.
The future of Adani Power’s ambitious cross-border electricity supply deal with Bangladesh has come under renewed uncertainty, as Dhaka’s interim administration signalled it could terminate the agreement if an ongoing government review finds evidence of corruption or irregularities.
Simultaneously, Adani Power has indicated it intends to seek international arbitration, citing payment delays and disputes over tariff components, setting the stage for a contentious standoff between the Indian corporate conglomerate and a key South Asian neighbour.
The controversy centres on the 2017 power purchase agreement under which Adani Power’s 1,600-megawatt coal-fired plant in Godda, Jharkhand, agreed to supply electricity to Bangladesh for 25 years. The project became commercially operational in April 2023 and was hailed at the time as a milestone for bilateral energy cooperation, with Indian coal generating power exclusively for the Bangladeshi grid. But what once symbolised regional energy integration is now increasingly mired in political scrutiny, legal ambiguity and public debate over transparency, costs and national interest.
Bangladesh’s interim government, which assumed responsibility after the departure of Sheikh Hasina, has launched a sweeping review of major infrastructure and energy contracts signed during the previous administration. The review follows allegations of mismanagement and excesses in power-sector deals, particularly in relation to quick-rental plants and imported-fuel-linked agreements that analysts say contributed to fiscal strain in recent years. With foreign exchange pressure and rising public concern over electricity tariffs, Bangladesh’s new leadership has positioned itself as committed to examining the financial and governance footprints of large-scale projects.
“Massive Governance Failure”
Energy affairs adviser Muhammad Fouzul Kabir Khan stated that no contract, including Adani’s, would be spared scrutiny if evidence of wrongdoing emerged. “The contracts generally state that no corruption has occurred, but if proven otherwise, cancellation is possible,” he said in comments to the media. His remarks reflect the firm tone adopted by the interim administration, signalling that politically sensitive deals from the past government are not immune to review.
The independent National Review Committee, headed by retired judge Moinul Islam Chowdhury, recently submitted an interim assessment pointing to what it described as “massive governance failure” and possible corruption in the broader power sector. The report has a specific chapter on the Adani deal. Officials familiar with the review process have cautioned that terminating long-term international contracts could carry substantial legal risks and financial consequences. Some analysts estimate that unilateral cancellation of foreign-funded power agreements could expose Dhaka to claims worth billions of dollars, potentially complicating the country’s fiscal recovery efforts.
Against this backdrop, Adani Power has disclosed that it plans to initiate international arbitration after raising concerns over delayed payments and disagreements involving cost calculations under the power-purchase agreement. Adani Power has pointed to a reduction in outstanding receivables from Bangladesh, noting payment settlements that lowered the backlog to roughly the equivalent of 15 days of tariff obligations. Earlier in the year, the receivables had approached nearly US $2 billion before subsequent payments reduced the pending amount significantly, according to company disclosures reported by Indian financial media.
Pricing Structure
At the heart of the payment dispute is the pricing structure. Reports suggest Bangladesh paid a rate of 14.87 taka per unit for power generated from Adani’s Godda plant in the fiscal year ending June 2024 – significantly higher than what the country paid on average for other imported power from India. Opposition figures and civil society critics in Bangladesh have long argued that the pricing terms were disproportionately favourable to the Indian supplier. Adani Power maintains that its tariff reflects contractual provisions, fuel-supply arrangements and infrastructure investments, including the dedicated transmission line built to transport electricity across the border.
The supply agreement is structured so that nearly all the electricity produced at the Godda plant flows into Bangladesh, ensuring consistent off-take, while India benefits from export-linked energy trade and strategic economic ties. However, the model has drawn attention as Bangladesh grapples with energy-sector deficits, foreign-exchange pressures due to fuel imports, and rising public scrutiny over long-term power purchase obligations. The political transition in Dhaka has heightened this scrutiny, as the interim government seeks to reassure both citizens and international partners that it is committed to transparency and fiscal prudence.
While the review process remains under way, both sides face significant stakes. For Bangladesh, renegotiating or cancelling the contract could demonstrate resolve against corruption but also risks legal exposure, investor concerns and power-supply complications. The Godda plant supplies a notable portion of Bangladesh’s imported electricity, and any disruption could affect energy planning unless alternative sources are secured in time. Conversely, maintaining the deal without addressing public concerns could invite criticism at home and undermine the government’s credibility.
Lasting Financial and Political Implications
Adani Power, already accustomed to intense scrutiny given its scale and global presence, now finds itself navigating a complex geopolitical and commercial challenge. International arbitration could protect its financial interests but may also prolong uncertainties and potentially strain India-Bangladesh diplomatic ties if not handled carefully.
Both governments have emphasised that bilateral cooperation remains important, but the dispute adds a new layer to the energy partnership. India views cross-border electricity exports as a building block of regional economic integration, particularly under initiatives promoting connectivity with South Asian neighbours. Bangladesh, historically reliant on imports and eager to maintain growth while stabilising its economy, is working to balance commercial obligations with public expectations for transparency and accountability.
The final report of the Bangladesh review panel is expected in early 2026, and its recommendations will likely determine whether the contract is upheld, renegotiated or terminated. Until then, talks between Dhaka and Adani Power are expected to continue, even as legal teams on both sides prepare for arbitration as a potential outcome. Analysts say that the case could shape future cross-border power agreements in South Asia, influencing contract design, risk-allocation standards and governance benchmarks.
For now, what began as a flagship example of regional electricity trade has evolved into a high-profile test of corporate resilience, governmental reform and diplomatic balance-keeping. The Godda-Bangladesh agreement has become a symbol of accountability and renegotiation, with lasting financial and political implications.
