Indictment of Gautam Adani and several top officials of the Adani conglomerate in the U.S. may become a factor in future negotiations between the Adani Group and the interim government in Bangladesh, energy experts in Dhaka have said. The criminal proceedings against Mr. Adani came a day after the high court in Dhaka ordered a probe into the 1,600-megawatt power deal that allowed the Adani Group to export electricity from its Godda power plant to Bangladesh.
“The energy agreement between Adani and Sheikh Hasina government was controversial from the beginning as this contract, like many other energy contracts of Hasina years, was not done through tendering. Despite that the interim government had taken a positive approach and tried to continue dialogue. But after the U.S. indictment, that space of dialogue may shrink as the group is likely to face greater pressure from Bangladesh to compromise on pricing,” said Dr. Ijaz Hossein, retired professor of BUET (Bangladesh Institute of Engineering and Technology).
The Ministry of External Affairs did not comment on the ongoing uncertainty over Adani Power in Bangladesh. Officials pointed out, however, that India had continued to supply electricity under the G2G agreements, and would not intervene unless required in the arrangements with a “private” company.
Adani Power Ltd., (APL) a part of the Adani conglomerate, had started supplying power from the first 800 MW ultra-super critical thermal power generation unit in Jharkhand in April 2023. The ambitious project aimed to cater to the growing energy market of Bangladesh, which had become an attractive destination of international energy majors. Dr. Hossein pointed out that Adani offered a deal that appeared interesting in the beginning as it promised to bring coal from Australia and Indonesia to meet Bangladeshi demand. Bangladesh lacked a deep sea port to handle large coal shipments and Adani’s offer made sense. “However, critics here had started saying that Adani, which apparently received government subsidy in India, did not transfer that benefit to Bangladesh,” said Dr. Hossein.
The project’s pricing was an issue even during Ms. Hasina’s tenure though it is believed that the matter was handled to Adani’s advantage because of better political relations between India and Bangladesh under Ms. Hasina. In February 2023, Bangladesh Power Development Board had written to Adani Power seeking revision of the price. Adani had quoted $400 per metric tonne (MT), but BPDB argued it should be less than $250/MT as that was the price they had paid for other coal-fired power plants.
Adani’s 2017 power deal with Bangladesh faced a major challenge with the fall of the Hasina government on August 5. With the fall of the Awami League government, several energy projects, especially coal power plants came under scrutiny. A special committee under the leadership of noted economist Debopriyo Bhattacharya was formed after the fall of the Hasina government and a team under Dr. Bhattacharya had started scrutinising all power agreements under Hasina government that included the deal with Adani.
U.S. indictment: Adani’s legal storm explained
Despite negative public sentiment, the interim government under Mohammad Yunus however maintained dialogue with Adani Power, which had at a point threatened to suspend power supply over unpaid dues. The interim government subsequently promised to process ₹1,450 crore allowing continued supply to Bangladesh. The latest move by the high court ordering a high-level probe into the deal has come as a twist in the plot as it will give Dhaka another opportunity to relook at the entire energy deal.
Published – November 21, 2024 10:56 pm IST
