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Bangladesh’s New Government Eyes Lower Electricity Tariffs, May Revisit Adani Power Agreement

Bangladesh’s newly elected administration is preparing to reopen discussions on its long-term power purchase agreement with Adani Power, aiming to secure lower electricity tariffs. The move is expected to be among the government’s early policy priorities following its assumption of office last week, according to officials familiar with the matter.

A senior government representative indicated that both the coal procurement costs and the resulting electricity tariffs under the current arrangement are viewed as elevated. Although formal communication has not yet been initiated with the company, revisiting the agreement is reportedly high on the administration’s agenda.

Rezaul Karim, Chairman of the Bangladesh Power Development Board, did not respond to requests for comment. A spokesperson for Adani Power stated that the company has not received any official notice regarding renegotiation and continues to meet its contractual supply commitments.

Adani Power has been exporting electricity to Bangladesh since 2023 from its 1,600 MW coal-based plant located in Jharkhand, India. Under a 25-year power purchase agreement finalized during the tenure of former Prime Minister Sheikh Hasina, Bangladesh imports the plant’s entire output.

Political developments over the past two years have influenced the bilateral energy arrangement. Hasina was removed from office in August 2024 following widespread protests. Subsequently, in late 2024, Adani Power temporarily curtailed electricity exports due to mounting unpaid dues from Bangladesh, raising concerns over potential power shortages. Supply levels were normalized in March after payments improved.

The current Prime Minister, Tarique Rahman, whose Bangladesh Nationalist Party secured a decisive electoral victory this month, has pledged to stabilize the nation’s economy and governance framework.

Any attempt to revise the agreement could also have diplomatic implications, particularly in the context of Bangladesh’s relations with India. Ties experienced strain during the interim administration led by Nobel laureate Muhammad Yunus, especially over Dhaka’s request for the extradition of Sheikh Hasina, who has been residing in India since 2024.

Officials have suggested that Bangladesh prefers to address potential revisions through direct negotiations rather than legal proceedings, seeking a mutually workable resolution while balancing its broader foreign policy objectives.