Bangladesh is done playing nice with a contract that’s essentially bleeding the national treasury dry. For years, the deal with Adani Power was treated like a sacred cow, shielded by the previous regime’s political interests. But the tide has turned. The newly elected government, following the path cleared by the interim administration, is moving to overhaul or outright scrap the 2017 agreement that brings electricity from the Godda plant in Jharkhand across the border.
The math doesn't work for Dhaka anymore. We're talking about a 25-year commitment where Bangladesh pays roughly 14.87 cents per unit—nearly 50% more than what it pays other Indian suppliers. When you're a nation grappling with a dollar crisis and a 3.49% GDP growth slump, paying an extra $400 million to $500 million a year isn't just a "bad deal." It’s a fiscal disaster.
The Problem with the Godda Agreement
The 1,600 MW Godda plant was built with one purpose: to sell power to Bangladesh. On the surface, that sounds like a win for regional cooperation. Dig a little deeper, and the cracks are everywhere. A government-appointed review committee recently flagged "egregious anomalies" in how the contract was handled.
One of the most baffling parts of the deal involves taxes. Typically, if you're a power producer, you pay your own corporate taxes in your home country. In this case, Adani apparently billed Indian corporate taxes directly to the Bangladesh Power Development Board (BPDB). Imagine buying a car and the dealership asks you to pay their property taxes too. That’s basically what’s happening here.
Then there's the coal pricing formula. Bangladesh argues that the coal used at Godda is priced way above market rates, which naturally inflates the final electricity bill. The review panel found that these aren't just clerical errors. They’ve pointed toward "systematic collusion" between the former Awami League government and the conglomerate. They’ve even found evidence of unusual money transactions involving officials back in 2017.
Legal Chess in Singapore
Bangladesh isn't just complaining; they’re hiring heavy hitters. The BPDB recently appointed 3VP, a top-tier British law firm, to represent them at the Singapore International Arbitration Centre (SIAC). This isn't a casual chat. It's a move to counter Adani’s own arbitration claims over $485 million in disputed dues.
The legal battle is complicated because the contract includes a sovereign guarantee. If Bangladesh just walks away, they could face penalties up to $5 billion. That’s why the strategy has shifted from "cancel everything" to "renegotiate or prove corruption." International law generally allows for the annulment of contracts if they were obtained through bribery or fraud. With the review committee claiming they have "enormous proof" of irregularities, the government is betting that a court will see things their way.
What’s at Stake for the Power Grid
You might wonder why Bangladesh doesn't just pull the plug today. It’s not that simple. Adani currently supplies about 10% of the country’s peak electricity. During the heat of the political transition in late 2024, Adani throttled supply because of unpaid bills, which nearly triggered widespread blackouts.
Bangladesh has since cleared a massive chunk of those arrears—paying $437 million in June 2025 alone—to keep the lights on while they prep their legal case. It’s a delicate balancing act. They need the power, but they can't afford the price tag. The goal now is to bring the cost down to around 8 or 9 cents per unit, which would align it with other regional imports.
The Real Cost of Doing Business
The fallout from this deal goes beyond just the electricity bill. It’s become a symbol of everything people hated about the old "Special Provisions" Act of 2010. That law allowed the government to sign energy deals without any competitive bidding. No transparency, no competition, just hand-picked winners.
- Price Gap: Bangladesh pays nearly 5 cents more per unit to Adani than to other Indian sources.
- Capacity Charges: The government pays for the plant’s potential even if they don't use the power.
- Environmental Impact: Relying on coal-fired plants like Godda clashes with the new goal of hitting 30% renewable energy by 2050.
If the government succeeds in revising the terms, it sets a massive precedent. It tells every other private power producer (IPP) in the country that the days of "sweetheart deals" are over. The BPDB is already looking at seven other major energy projects signed under the old regime.
What Happens Next
The new government is pushing for an out-of-court settlement first because it's faster and cheaper. But they’ve made it clear they aren't afraid of the Singapore courts. They’ve already set up a two-member negotiating panel to go toe-to-toe with Adani’s legal team.
For the average person in Dhaka or Chittagong, this isn't just about high-level politics. It’s about whether their monthly utility bill stays manageable. If the government can shave $10 billion off the total cost over the next 25 years, that’s money that can go into the grid, renewables, or education.
Watch for the findings from the Anti-Corruption Commission. If they can tie the 2017 signatures to specific illegal transactions, the legal ground for cancellation becomes a lot firmer. Until then, expect a lot of tough talk and high-stakes maneuvering in Singapore. The era of unquestioned energy contracts in Bangladesh is officially dead.
