A confidential Bangladeshi government review has cast new doubt on one of South Asia’s most prominent cross-border power agreements, concluding that electricity imported from an Indian coal-fired plant operated by Adani Power is significantly more expensive than comparable alternatives. Beyond the headline figures, the findings have reignited a wider debate over energy governance, procurement practices and Bangladesh’s long-term dependence on fossil fuel imports.
The assessment, carried out by the National Review Committee (NRC) and dated 20 January, examined the power purchase agreement governing electricity imports from Adani Power’s 1.6-gigawatt Godda plant in India’s Jharkhand state. While the report has not been made public, its conclusions have circulated within policy and industry circles, where they are increasingly seen as a potential inflection point in Bangladesh’s power-sector planning.
According to the NRC, electricity from the Godda plant is priced nearly 40 per cent higher than that of its closest private-sector comparator, making it the most expensive electricity import arrangement Bangladesh currently maintains with India. The committee also found that the contract showed the steepest cost escalation among Bangladesh’s cross-border power deals, at a time when the country is grappling with foreign-exchange shortages, rising energy subsidies and public resistance to higher tariffs.
A contract shaped by choices, not markets
Rather than attributing the cost gap to global coal prices or exceptional operating conditions, the review focused on the structure of the agreement itself. The NRC concluded that the elevated tariff stemmed from “specific contractual choices” and raised concerns over the procedures through which the deal was approved.
One of the most contentious elements is the inclusion of Indian corporate taxes in the tariff charged to Bangladesh. Internationally, independent power producers are generally expected to absorb corporate tax obligations in their home jurisdictions. Passing those costs on to a foreign buyer, the committee noted, is highly unusual and effectively transfers fiscal risk to the importing country.
The review also found that the Godda plant relies on coal supplies priced well above prevailing market benchmarks, further inflating the cost of electricity. Taken together, these factors led the NRC to estimate that Bangladesh is paying around 50 per cent more than a reasonable benchmark price for power from the plant.
For a country where energy affordability is closely tied to economic stability, the findings carry political as well as financial weight. Electricity tariffs remain a sensitive issue in Bangladesh, with households and manufacturers already under strain from inflation and slowing export demand.
Energy security versus energy risk
The Godda plant occupies a strategically important position in Bangladesh’s power system, supplying more than 10 per cent of the country’s imported electricity. Over the past decade, successive governments in Dhaka have prioritised energy security through diversification, signing long-term contracts for imported power, liquefied natural gas and coal to support rapid industrialisation.
But the Adani review highlights the downside of that strategy. Long-term, take-or-pay contracts linked to fossil fuels can lock countries into rigid pricing structures that become increasingly misaligned with market conditions, particularly during periods of global volatility.
“Coal-based cross-border power deals embed multiple layers of risk,” said a South Asian energy economist familiar with Bangladesh’s power sector. “Fuel prices, exchange rates and regulatory costs can all move against the buyer. If a contract lacks flexibility, those risks are effectively transferred to the state and, ultimately, to consumers.”
Bangladesh’s experience over the past two years has underscored that vulnerability. A surge in global fuel prices following geopolitical shocks sharply increased the cost of LNG and coal imports, draining foreign-currency reserves and forcing the government to ration power and gas supplies.
Adani’s position and payment strains
Adani Power has said it was neither consulted during the review nor provided with a copy of the report, limiting its ability to respond to the committee’s conclusions. The company has maintained that it continues to supply electricity to Bangladesh despite mounting payment arrears, a growing issue across South Asia as state-owned utilities struggle to balance costs and revenues.
In a statement issued amid increasing scrutiny of the power purchase agreement, the company called on Dhaka to clear its dues at the earliest opportunity, warning that continued payment delays were disrupting normal operations even as electricity supplies were maintained.
The dispute reflects a broader challenge facing power sectors across the region. High fuel costs, currency pressures and regulated tariffs have contributed to rising arrears, undermining the financial health of state utilities. Analysts note that while suppliers have so far continued deliveries to avoid disruptions, prolonged payment backlogs risk eroding confidence in long-term power contracts and complicating future investment decisions.
A turning point for policy?
The NRC has recommended a broader reassessment of Bangladesh’s electricity contracts, including the renegotiation of provisions deemed fiscally damaging. While reopening sovereign-backed power agreements is politically and legally complex, the review has strengthened calls for reform within Bangladesh’s policy community.
At the same time, the country’s energy landscape is shifting. Renewable energy costs, particularly for solar, have fallen sharply across South Asia. Regional grid connectivity is improving, and more flexible power markets are beginning to emerge. Against this backdrop, critics argue that expensive, inflexible coal-based imports appear increasingly misaligned with Bangladesh’s long-term interests.
The implications extend beyond Bangladesh’s borders. India has sought to position itself as a regional power exporter, supplying electricity to neighbouring countries as part of a broader push to integrate South Asia’s energy markets. Analysts caution, however, that the success of this strategy will depend not only on physical connectivity but also on transparent pricing, robust governance and contracts perceived as fair by all parties.
For Bangladesh, the review lands at a moment of narrowing options. Policymakers must decide whether to challenge an expensive legacy contract, absorb higher costs to preserve a strategically important supply line, or rethink how future power is procured as global and regional energy markets evolve. The scrutiny of the Adani deal has become a cautionary tale for emerging economies pursuing rapid energy expansion: securing dependable electricity is essential, but doing so through rigid or poorly structured contracts can create lasting fiscal burdens and limit room for manoeuvre. The choices made now may shape not only Bangladesh’s relationship with a powerful regional supplier but also the trajectory of its energy transition for decades to come.
.jpg "LPG cylinder price reduced to Tk1,885 in Bangladesh")