Bangladesh’s interim government has accused Indian energy company Gautam Adani led Adani Power of violating a multi-billion-dollar energy agreement by failing to disclose tax benefits granted to a coal-fired power plant central to the deal. Sources reveal that the government plans to renegotiate the terms of the contract, citing payment disputes, while Adani Power denies any breach of agreement.
In 2017, Adani Power, owned by billionaire Gautam Adani, entered into an agreement to supply power from its coal-fired plant in eastern India to Bangladesh. The Bangladeshi government is now seeking to renegotiate the deal, which it claims is costing more than other similar power deals, according to Bangladesh power agency documents and letters between the two parties cited in the report, which also interviewed six Bangladesh officials.
Documents from Bangladesh’s power agency indicate that the terms of the deal have been costly for Dhaka compared to other coal-based power agreements. Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus, now intends to revisit the deal, citing transparency issues and payment disputes.
Payment Disputes And Tax Concerns
Since Adani Power began supplying electricity in July 2023, Bangladesh has fallen behind on payments, reportedly owing several hundred million dollars. Both parties dispute the exact amount of the outstanding bill.
Bangladesh’s energy minister, Muhammad Fouzul Kabir Khan, stated that the country now has sufficient domestic power generation capacity, though some plants remain inactive. Hence, this deal includes provisions for tax exemptions, but Bangladesh claims that Adani Power did not inform them of changes to the plant’s tax status, as required by the agreement. This failure has led to concerns over potential savings that Bangladesh believes it should have received. The Bangladesh Power Development Board (BPDB) estimates potential savings of around $28.6 million from the tax benefits.
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