Bangladesh’s interim government, led by Nobel Peace Prize winner Muhammad Yunus, has raised serious questions about a major energy deal with Adani Power, a company owned by Indian billionaire Gautam Adani. This deal, signed in 2017 under the rule of former Prime Minister Sheikh Hasina, has now become a hot topic in both countries.
The Deal in Question
The agreement was for Bangladesh to buy electricity from Adani Power’s coal plant in Jharkhand, India. This plant was specifically built to supply power to Bangladesh and currently provides about 10% of the country’s electricity. On paper, the deal seemed beneficial, but recent allegations suggest that things aren’t as straightforward as they appear.
The interim government claims Adani hasn’t shared the tax benefits granted by the Indian government for this project. This is despite a clause in the deal that reportedly promised those benefits to Bangladesh. What’s more, the new administration believes the deal was approved without proper procedures, making it more expensive than similar power agreements.
Unpaid Bills and Tense Relations
Since Adani started delivering electricity to Bangladesh in July 2023, the country has fallen behind on payments. Reports suggest Bangladesh owes hundreds of millions of dollars, though both sides argue about the exact amount. Adding to the tension, Bangladesh’s power minister, Muhammad Fouzul Kabir Khan, said the country could now manage without this imported power, thanks to improved domestic capacity.
A Bigger Controversy
This isn’t the first time Adani has faced trouble. Recently, U.S. prosecutors accused Gautam Adani and his executives of bribing Indian officials to secure power contracts. The Adani Group has denied these allegations, calling them baseless, but they’ve added fuel to the fire surrounding the Bangladesh deal.
Energy Woes in Bangladesh
Bangladesh is already struggling with rising energy costs, spending over $2.2 billion on imports. The country is also asking for financial help from organizations like the World Bank. To make matters worse, many renewable energy projects started under Hasina’s leadership haven’t taken off, leaving the country more dependent on costly imports.
A Shifting Relationship with India
When Hasina was in power, Bangladesh had close ties with India. Together, they worked on several big projects, including in the energy sector. However, after weeks of violent protests, Hasina was ousted in August, and she has since fled to India, facing criminal charges at home. Under Yunus’s leadership, the interim government has taken a different approach, hinting at revisiting deals that no longer serve Bangladesh’s interests.
What’s Next?
The controversy surrounding Adani’s deal comes at a time when Bangladesh is working on other major energy projects. For instance, it’s building the Rooppur Nuclear Power Plant with Russia’s help, a $12.6 billion project funded mostly by Russian loans. But Western sanctions on Moscow have made loan repayments tricky, forcing both countries to negotiate a new payment plan.
This power struggle, both literally and politically, raises important questions: Can Bangladesh become more self-reliant in energy? And how will the changing political landscape reshape its ties with India? For now, all eyes are on the Yunus-led government as it navigates these challenges.
