Bangladesh’s interim government now intends to revisit the agreement, citing transparency issues and payment disputes.
Bangladesh’s interim government has accused energy supplier Adani Power of breaching a multibillion-dollar energy deal by failing to disclose tax benefits it offered to a coal-fired power plant, documents seen by Reuters show. Power plants are at the heart of the deal New Delhi received.
Billionaire Gautam Adani’s Indian company signed a deal with Bangladesh in 2017 to supply power from its coal-fired facilities in eastern India. Dhaka said it wanted to renegotiate the deal, which was initiated by then-Prime Minister Sheikh Hasina, according to Bangladesh Electricity Authority documents and communications between the two sides reviewed by Reuters, as well as interviews with six Bangladeshi officials. The cost to Bangladesh, awarded without a tender process, was much higher than previous coal power deals.
Dhaka’s agreement terms are expensive compared with other coal-fired power generation deals, according to Bangladesh Electricity Authority records, Reuters reported. Bangladesh’s government, led by Nobel laureate Muhammad Yunus, now plans to review the agreement amid payment conflicts and transparency concerns.
Bangladesh has reportedly been behind on payments and owes hundreds of millions of dollars since Adani Power started providing electricity in 2023. The exact amount of the overdue bill is disputed by both parties.
The main point of disagreement is Adani Power’s failure to notify Bangladesh of tax benefits for its Godda plant, which operates under Indian Special Economic Zone regulations. Under the terms of the original agreement and an implementation addendum agreed in November 2017, Adani Power must promptly notify Bangladesh of any changes in the plant’s tax status and pass on any tax exemption benefits.