The Bangladesh Power Development Board (BPDB) and the interim government of Bangladesh have openly warned that a 2017 power purchase agreement (PPA) with India’s Adani Power Limited could be cancelled if corruption or irregularities are proven.
Energy Affairs Adviser Muhammad Fouzul Kabir Khan stated:
“The contracts (generally) state that no corruption has occurred, but if proven otherwise, cancellation is possible.”
The agreement covers a 25-year deal signed in 2017 in which Adani’s Godda coal-fired power plant in Jharkhand, India, was to supply electricity to Bangladesh.
A six‐member Review Committee found what it described as “massive governance failure” and “massive corruption” in the power sector contracts under the previous government led by Sheikh Hasina.
Background: The Deal, the Parties & the Dispute
- The contract: Signed in 2017 between Adani Power and Bangladesh, having Bangladesh purchase power produced from the 1,600 MW Godda plant in Jharkhand.
- Bangladesh paid around USD 437 million in June (2025) towards dues under the contract, reducing outstanding payments.
- Key areas of dispute include: tariff levels linked to imported coal prices, late payment surcharges, and whether tax/ duty benefits accruing to the plant in India were passed on to Bangladesh.
- The Review Committee’s final findings are expected in January 2026, and its interim report has triggered the official warning.
Why Bangladesh is Considering Cancellation
- Allegations of corruption & irregularities: The Review Committee alleges “massive corruption” and “fraud, collusion, irregularities” in power contracts
- High cost of power supply: Observers say the tariff under the deal is significantly higher than comparable domestic or regional power costs.
- Payment and debt issues: Bangladesh owes large sums under the contract, and supply has been impacted.
- Change in political oversight: With a new interim government reviewing past high-value deals signed under the previous regime, many contracts are under scrutiny
- Legal and reputational risk: Bangladesh is conscious of international arbitration risk if the contract is unilaterally terminated. Business Standard
Implications If the Deal Is Cancelled
- For Adani Power: Cancellation could mean loss of long‐term revenue from Bangladesh, legal costs, arbitration claims.
- For Bangladesh: While possibly reducing exposure to a high‐cost deal, cancellation may trigger massive compensation claims (one jurist estimates up to USD 5 billion) and impact cross-border energy ties.
- For India–Bangladesh relations: The move could strain bilateral cooperation in energy and infrastructure and may lead to renegotiation of other contracts.
- For the energy sector: It sends a strong signal about contract transparency and governance in infrastructure deals in the region.
- For investors: This highlights the risk of cross-border PPAs, high cost of imported-coal-based power, and importance of stable regulatory/governance environments.
What to Monitor Going Ahead
- The final report of the Review Committee due in January 2026: Will it recommend cancellation, renegotiation or other action?
- Whether Bangladesh formally initiates contract termination or opts for renegotiation/settlement to avoid arbitration.
- Reactions from Adani Power and India’s government: how they respond diplomatically and legally.
- Any arbitration filings: as articles suggest Adani is preparing or may pursue international arbitration.
- Wider impact on BBIN (Bangladesh-Bhutan-India-Nepal) cross-border energy cooperation and on Indian companies in overseas PPP/energy contracts.
