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An official review into Bangladesh’s power sector has concluded that long-term deals signed without competition are adding billions of dollars a year to electricity costs, in a move likely to increase pressure on the country to renegotiate contracts with companies including India’s Adani Power.
Power prices were being pushed to levels that threatened Bangladesh’s industrial competitiveness and strained households, according to a report published on Sunday by a government-commissioned committee.
“Overpricing is a deliberate outcome of contract design, suggesting systematic collusion between politicians, bureaucrats and businesses in the award of these contracts,” the National Review Committee’s report said.
The review comes weeks before Bangladesh is set to hold its first general election since Sheikh Hasina’s 15-year rule collapsed in August 2024 amid student-led protests and mounting corruption allegations.
An interim government led by Muhammad Yunus has launched sweeping investigations into state-linked contracts and alleged graft, with Bangladeshi authorities estimating that $234bn was plundered from the country during her tenure.
The review published on Sunday identifies the Adani power import agreement as one of the most striking examples of what it describes as “rent extraction” embedded in long-term contracts approved under emergency legislation during Sheikh Hasina’s tenure.
It estimates that Bangladesh is paying about 50 per cent more than reasonable benchmark prices — equivalent to about 4-5 US cents per kilowatt hour — for electricity supplied from Adani’s coal-fired plant in India, while bearing virtually all fuel, currency and demand risks under the contract.
The report also highlights projects involving Summit Group, S Alam Group, and a power station developed by Indian energy company Reliance Power and Japanese energy group Jera, describing them as “examples of egregious anomalies”.
The committee argues that the terms of many contracts could not have emerged from competitive procurement and instead reflect a broader governance failure.
“These wrong decisions are not mistakes,” the committee said. “They suggest systematic collusion between businesses, politicians and bureaucrats to award overpriced and unnecessary contracts in order to deliberately create huge excess profits that are then shared between these parties.”
A spokesperson for Adani Power said the company had not been approached by the committee and the review had not been made available ahead of publication.
They said that Adani Power supplied “reliable, high-quality and amongst the most competitively priced (amongst similar imported coal-based plants) power”.
Power supplies from Adani’s plant to Bangladesh have contributed to tense relations between Dhaka and New Delhi. Adani, the influential conglomerate chaired by politically connected billionaire Gautam Adani, started cutting electricity to Bangladesh at the end of 2024 due to a backlog of overdue payments.
The situation has since stabilised and Adani Power said in August that it was receiving regular payments from Bangladesh.
“We have continued to honour our supply commitment despite large receivables, when many other generators have cut back or even stopped,” said the spokesperson.
Summit Group said the allegations were “entirely speculative and without merit”, adding that its Meghnaghat plant had been ranked the third least expensive power plant to dispatch energy by the Bangladesh Power Development Board last year.
The project is backed by “international stakeholders and lenders with extremely strong due diligence and governance requirements”, it said.
S Alam Group, Reliance Power and Jera did not immediately respond to requests for comment. Reliance Power, part of Anil Ambani’s Reliance Group, is separate from his older brother Mukesh’s Reliance Industries.
Losses at the Bangladesh Power Development Board, the state-owned single buyer of electricity, have risen to more than $4.1bn a year while annual government subsidies have climbed towards $5bn, the report said.
Electricity tariffs and power supply are among the most politically sensitive issues in Bangladesh, where the garment sector accounts for about 80 per cent of export earnings and employs 4mn people.
Observers believe any new government will face popular demands to take action against corrupt and overpriced power deals. The frontrunners in the February 12 election, the Bangladesh Nationalist Party (BNP) and a bloc led by the Islamist Jamaat-e-Islami, have sought to capitalise on public anger over corruption, rising prices and government failures.
A member of the committee said they hoped the government that came in after elections would “take a strong decision” to deal with the power contracts highlighted in the review.
Any attempt to renegotiate contracts could expose Bangladesh to international arbitration, though the committee argues that the cost of inaction outweighs the legal risks of reopening deals.
The review finds that Bangladesh has accumulated between 7.7 and 9.5 gigawatts of excess generation capacity, much of it tied to “take or pay” agreements that require payment even when plants sit idle. Installed capacity has expanded more than fivefold since 2009, but utilisation has remained at about 40 to 50 per cent.
If nothing is done to reduce the contracted prices, tariffs to industry and consumers would have to rise 86 per cent, it added, threatening deindustrialisation of Bangladesh.
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