Bangladesh says it could scrap Adani Power deal if corruption is proven

Bangladesh’s interim administration has warned that it will not hesitate to terminate its high-profile power purchase agreement with India’s Adani Group if ongoing investigations confirm evidence of corruption or irregularities in the deal.

The remarks from energy affairs adviser Muhammad Fouzul Kabir Khan come as the interim government continues to review major contracts signed under the ousted Sheikh Hasina regime, amid allegations of widespread graft and mismanagement in the power sector.

“The contracts (generally) state that no corruption has occurred, but if proven otherwise, cancellation is possible,” Khan was quoted as saying by local media on Sunday.

His comments followed the submission of an interim report by the National Review Committee, a six-member panel formed by the caretaker government to examine all major power sector agreements inked during the Hasina years, including the controversial 2017 Adani Power deal.

There has been no immediate response from the Adani Group, which operates in Bangladesh through its subsidiary Adani Power (Jharkhand) Limited.

The committee, chaired by retired high court judge Moinul Islam Chowdhury, said it had uncovered “massive governance failure” and “massive corruption” across multiple projects, particularly in quick rental power plants — short-term facilities introduced under Hasina’s government to address chronic power shortages.

“In the course of review of power purchase agreements, we found there was massive corruption, collusion, fraud, irregularities and illegalities,” Chowdhury told reporters in Dhaka, adding that a separate report had been compiled specifically on the Adani agreement.

The final report is expected to be submitted in January 2026, and its findings could have far-reaching implications for Bangladesh’s energy policy as well as its relations with major Indian corporations that invested heavily during Hasina’s tenure.

The 25-year contract, signed in 2017 between Adani Power and the Bangladesh Power Development Board (BPDB), committed Bangladesh to purchase 100 per cent of the electricity produced at Adani’s 1,600 MW Godda coal-fired power plant in India’s Jharkhand state. The plant was designed to supply power exclusively to Bangladesh via a cross-border transmission line.

The project has long faced criticism from Bangladeshi opposition leaders and energy experts, who argue that the tariffs were inflated and that the country was locked into an unfavourable deal. Questions were also raised about the decision to import expensive coal-based electricity rather than invest in domestic or renewable capacity.

Earlier this year, the BPDB cleared a significant portion of its arrears, paying USD 437 million to Adani Power, substantially reducing its outstanding dues. The payment followed months of supply disruptions after Bangladesh reportedly fell behind on its payments amid a severe foreign exchange crunch.

One committee member, speaking on condition of anonymity, told reporters that while foreign power contracts carry complex legal obligations, the panel believed substantial evidence of corruption would emerge once formal legal proceedings begin.

“You will get strong evidence of corruption when a legal process begins at home and abroad against Adani and a few other companies related to Adani who are involved in the corruption,” the state-run Bangladesh Sangbad Sangstha (BSS) quoted the member as saying.

However, leading legal experts have urged caution. Prominent jurist Shahdeen Malik warned that unilateral termination could expose Bangladesh to international arbitration claims amounting to billions of dollars.

“There are legal grounds to cancel such contracts, but the risks are enormous,” Malik said, suggesting that compensation claims could reach USD 5 billion if the dispute were taken to an international court.

The review of the Adani deal forms part of a broader effort by the interim government to clean up the energy and infrastructure sectors, which have long been criticised for opaque procurement practices and politically connected tendering under the Hasina administration.

Bangladesh’s power generation capacity expanded rapidly during Hasina’s 15-year rule, but analysts say this growth came at the cost of financial sustainability, with idle capacity payments, costly imports, and dependence on private operators burdening the state exchequer.

As the interim government moves to restore public trust, the fate of the Adani contract — one of the largest cross-border energy projects between India and Bangladesh — is now a litmus test for Dhaka’s commitment to transparency and accountability.

With PTI inputs