Winning Bizness Desk

Mumbai. The Adani Group, already under scrutiny over bribery allegations in the United States, is now facing additional challenges in Bangladesh. The interim government of Bangladesh has recommended forming an investigative agency to review the power agreement between the Adani Group and the Sheikh Hasina-led government. This recommendation comes from the Ministry of Power, Energy, and Mineral Resources, which is also pushing for the review of six other major energy agreements signed during Hasina’s tenure as Prime Minister.

Investigative Agency Proposed

The interim government’s Chief Advisor, Mohammad Yunus, confirmed the recommendation through an official statement. A committee reviewing the country’s power and energy agreements has suggested appointing an investigative body to thoroughly examine deals signed between 2009 and 2024. The agreements under review include the Adani Group’s Godda Power Plant project and another with a Chinese company that constructed a 1320 MW coal-fired power plant. The committee claims to have gathered substantial evidence suggesting that these agreements either need to be canceled or renegotiated under international legal frameworks. The committee has also requested additional time to review other pending contracts.

The Godda Power Plant Agreement

The Godda Power Plant in Jharkhand, India, is the Adani Group’s first international power project. This 1600 MW coal-fired thermal power plant was built to supply electricity to the Bangladesh Power Development Board (BPDB). The agreement to build the plant and supply electricity was signed with the Sheikh Hasina government in 2016, and electricity exports began on April 10, 2023. Under a 25-year Power Purchase Agreement (PPA) signed in 2017, Adani Power Limited committed to supplying electricity from the Godda plant to Bangladesh. However, the arrangement has faced criticism, and questions have been raised about its fairness and long-term viability. Recently, the Adani Group asked the Bangladesh government to settle an outstanding power supply bill amounting to $800 million. In response, the BPDB stated that it had already paid $150 million despite the country’s dollar crisis.

Calls for Cancellation or Renegotiation

The review committee has flagged the Godda project and other power agreements for potential renegotiation or cancellation. These suggestions are based on evidence that, according to the committee, points to issues in how the deals were structured. The interim government appears to be prioritizing transparency and international compliance in handling these agreements.

Controversy Surrounding the Adani Group

The Adani Group’s troubles are not limited to Bangladesh. On November 20, a U.S. federal court accused Gautam Adani and eight others of bribery and fraud involving billions of rupees. The allegations claim the group attempted to pay $265 million (₹2,200 crore) in bribes to Indian officials for securing solar energy contracts. The case, involving Adani Green Energy Limited, has severely impacted the group’s reputation and financial standing. International repercussions have followed. For instance, Kenya recently canceled all contracts with the Adani Group, including projects worth ₹21,422 crores related to power transmission and airport expansion.

Record Construction Time

Despite these controversies, Gautam Adani has previously highlighted the success of the Godda Power Plant. Sharing a photo with Sheikh Hasina, he praised the teams in India and Bangladesh for commissioning the plant in just three and a half years, even amid the COVID-19 pandemic.

Moving Forward

The recommendations by Bangladesh’s interim government mark another setback for the Adani Group, signaling heightened scrutiny over its international ventures. With both local and global investigations intensifying, the group faces mounting challenges in maintaining its business reputation and securing future contracts. The developments in Bangladesh, combined with similar actions by Kenya and legal issues in the U.S., indicate that the Adani Group’s ongoing controversies could have far-reaching consequences across its operations worldwide.