The critical issues raised in the Adani Power treaty in Bangladesh, and its evolving natures, also underline more general challenges to energy procurement, regional politics, and governance. Things have become a bit tense over pending payments and reduced electricity supply and there are parallels to that in Sri Lanka and in other countries with the same type of energy procurement issues.
Adani Power in Bangladesh: A Crisis Unfolds
Since 2015, it has been buying about 10 percent of its electricity from Adani Power’s 1,600 MW coal fired plant in Godda, India. But it remains embroiled in disputes over $850 million in unpaid dues. Adani Power has reduced electricity supply by more than 60 per cent, it says due to financial constraints, and supply will be curtailed further unless financial support is forthcoming. In response, Bangladesh has issued letters of credit, reducing its debt by $173 million. But the interim Bangladeshi government is reviewing the agreement, after allegations it includes inflated tariffs and lack of transparency.
Second, this crisis coincides with political instability. Former Prime Minister Sheikh Hasina has resigned after protests and an interim administration is left to deal with energy shortfalls and rework existing agreements. If they are confirmed, negotiations or the cancellation of the power purchase agreement (PPA) could be triggered by legal inquiries, including a High Court reassess the PPA.
Similar Challenges in Sri Lanka
Adani Green Energy’s 500 MW solar project is a similar situation as it is faced by Sri Lanka. There has been public outcry, legal challenges over allegations of corruption, inflated pricing and lack of competitive bidding. Sri Lanka’s contract terms could hugely raise electricity costs, critics argue. Amidst this political unrest, the Sri Lankan government is following Bangladesh’s lead in reassessing Adani’s deals and energy policies and procurement strategies.
Key Points Regarding Sheikh Hasina's Involvement:
Contract Signing: However, Hasina is responsible for the PPA signed during her tenure — an incredible 2009 to 2024 — and her government is responsible for allowing Adani Group to become the partner to Bangladesh through this important energy partnership. It was part of a broader plan to boost Bangladesh's energy supply as demand grows.
Political Context: Questions have emerged over the deal after Hasina was removed from power during unrest that brought corruption charges against her. Now led by Chief Adviser Muhammad Yunus, the interim government is reviewing the agreements struck during Hasina's administration — of which the one with Adani is included.
Allegations of Corruption and Mismanagement: "We have enormous proof that perhaps had there been irregularities, perhaps there were inflated prices, perhaps not?" the interim government's spokesman said. It cites allegations that Adani secured terms too favorable to itself at the expense of Bangladeshi consumers.
Impact on Energy Policy: A review of the Adani deal is ongoing, however, and the Adani deal mirrors broader energy procurement concerns about governance and transparency in Bangladesh. While the interim government reviews these contracts, it will be assessing them to make sure that future agreements are more equitable, and beneficial for the country.
Legal Proceedings: The Bangladesh High Court had earlier ordered a committee to investigate the PPA and other contracts signed under Hasina's leadership. The findings of this inquiry could have huge legal consequences for the former government and the Adani Group.
Key points that might be mentioned in international court.
1. Unfavorable Terms
Inflated Pricing: In light of the power purchase agreement (PPA), Bangladesh has a point to argue that the costs passed on to them are excessively high, far above the level of domestic electricity prices, which look exploitative.
2. Previous Government’s Legitimacy
Questionable Contract Legitimacy: For its part, the interim government could maintain that the agreement was concluded under a previous government that is being accused of electoral fraud and lack of transparency in joining the accord.
3. International Law Violations
Fair Trade Principles: Bangladesh could contest the contract in international legal norms of fair trade and human rights, on the ground that it is exploiting a developing nation.
4. Corruption Evidence
Irregularities in the Agreement: But if there is evidence, credible evidence, that corruption played a role in the PPA, that can be the basis for challenging the validity of the PPA in court.
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