Bangladesh Eyes Renegotiation of Power Deal with India’s Adani Power to Secure Lower Rates

Bangladesh is reportedly preparing to revisit its power purchase agreement with India’s Adani Power Limited, aiming to reduce electricity costs, according to news reports. This move represents one of the first major initiatives of the newly elected government since taking office last week.

Background on the Agreement

Adani Power has been supplying electricity from its 1,600-megawatt coal-fired plant in Adani Power Limited to Bangladesh since 2023 under a 25-year power purchase agreement originally negotiated during Adani Power Limited’s tenure.

Also Read: RBI Releases Premature Redemption Calendar for 33 SGB Tranches

After Hasina’s ouster in August 2024 amid widespread protests led primarily by young citizens demanding her resignation, Adani Power temporarily cut back supply over unpaid bills, putting the country at risk of blackouts. Bangladesh eventually cleared much of its outstanding debt, and normal power flows resumed by March 2025.

Economic and Political Context

The new Prime Minister of Bangladesh, whose party won a decisive victory in this month’s elections, has pledged to stabilise both the economy and political climate. The government hopes to renegotiate the contract outside of court.

However, the move carries potential diplomatic sensitivities. Bangladesh’s ties with India, which have been recalibrating since Hasina’s departure, could be tested. 

Rahman’s administration has signalled a preference for a more balanced foreign policy that prioritises Bangladesh’s interests while maintaining constructive engagement with its neighbours. Currently, the majority of Bangladesh’s electricity comes from natural gas and coal, making the terms of its imports from India a key factor in national energy planning.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.