Adani Power’s India grid plan gains urgency amid Bangladesh tariff row
A committee set up by Bangladesh’s interim government to examine power supply agreements signed under the ousted Sheikh Hasina regime accused Adani Power of exporting electricity at prices nearly 50% above market prices. Mint has seen a copy of the report.
While Adani’s coal-fired plant in Jharkhand’s Godda is currently connected only to the Bangladeshi grid, the company has also received approval to connect to the Indian grid. The company had stated that it would be connected to India’s energy infrastructure by December 2025, but this has not been completed yet.
“We expect it to be connected by December 2025,” Adani Power’s chief executive officer (CEO) SB Khyalia said in an analyst call on October 30.
Adani Group did not comment on whether the plant was yet connected to the grid and, if not, when it would be completed. A person aware of the development said grid connection is imminent, especially since all approvals have been received.
The company can supply electricity to India only under two conditions: if there is no sustained energy planning by Bangladesh or if the country defaults on payments, Khyalia said in an interview in October.
Only partial relief
If Bangladesh terminates the agreement, connectivity with the Indian grid will only partially offset the potential margin impact to Adani Power. This is because the company supplies electricity to India’s neighbor at $0.135 per unit ( ₹Figure 12.3) showed the report of Bangladesh National Review Committee (NRC) dated January 20.
In contrast, Adani Power sells electricity in the commercial market in India on average. ₹5.37 per unit in the first six months of FY26, as per the October 2025 investor presentation.
Adani Power has been providing thermal energy to Bangladesh from its Godda facility since 2023, under a 25-year agreement signed in 2017. ₹Revenue of 8,300 crore and above per year ₹Earnings before interest, tax, depreciation and amortization (EBITDA) from the deal is 4,800 crore, as disclosed by the management in an analyst call on May 1, 2025.
This accounts for more than 14% of the company’s FY25 revenue and almost a fifth of its EBITDA for the year; This makes the agreement vital for the company and therefore the Adani Group.
If Bangladesh scraps the Adani Energy project, one of the direct consequences will be the company’s cash flow. Adani Power is the cash cow of the Adani Group, which has 13 listed companies. Adani Energy produced ₹Free cash from operations in the year ended March 2025 stood at ₹18,711 crore; ₹17,200 crore was generated by Adani Ports and Special Economic Zone.
Adani Group did not comment on what the potential financial impact of a possible termination of the deal would be.
“Bangladesh pays a relatively high tariff of 14.87 taka per unit, higher than alternative sources, leading to a review by a national scrutiny committee of allegations of corruption, collusion and fraud in the original agreement signed under Sheikh Hasina’s government,” analysts at brokerage firm JM Financial said in a Jan. 2 report. he said. Bangladesh also accused Adani Power of failing to implement Indian tax incentives that were supposed to lower tariffs and disputed coal cost calculations, claiming prices were higher than market levels, analysts said.
Analysts added that cash flows from the 1.6GW Godda plant remain subject to payment delays, risk of power purchase agreement renegotiation and legal uncertainty following review by the Bangladesh Supreme Court, despite recent clearance of past dues.
Cost inflation claims
The five-member NRC, established by Bangladesh’s interim government to review power purchase agreements signed with six independent companies, reported that the country paid more money to Adani than it should have under the agreement.
“We conservatively estimate overpricing of 4-5 cents per kWh for the Adani Godda imported power contract, meaning the price paid is approximately 50% higher than it should be,” the NRC report said.
It further said, “The benchmarking conducted by NRC shows that the tariff approved for Adani was the highest among comparable electricity import contracts from India at the time of signing, and subsequent tariff increases exceeded precedent contracts by a significant margin.” “This difference suggests that rising costs are not an inherent feature of cross-border energy trading but are the result of certain contractual choices.”
The five-member panel that wrote the report included Moyeenul Islam Chowdhury, a former high court judge; Abdul Hasib Chowdhury, professor at Bangladesh University of Engineering and Technology; Ali Ashfaq, former partner of KPMG Bangladesh; Mushtaq Husain Khan, professor of economics at SOAS University of London, and Zahid Hussain, former chief economist of the World Bank Dhaka office.
Emails and text messages sent to Khan and Ashfaq went unanswered.
Adani Group spokesperson said that he had not received any communication regarding the review committee report and the said report had not been submitted to the company. They therefore declined to make any specific comments on the report’s findings. “We were never approached by any Bangladeshi official to give our opinion or share any input,” the spokesperson said.
The spokesperson further said, “Adani Power is a key partner of the Bangladesh power sector, meeting approximately 10% of the country’s energy demand. We supply energy that is reliable, of high quality and at the most competitive prices (compared to similar imported coal-based plants). At a time when many other generators have cut or even stopped supply, we have continued to fulfill our supply commitment despite large receivables.” The spokesperson also added that the company called on the Bangladesh government to liquidate its dues as soon as possible because they affect the global crisis. the company’s operations.
Pending dues from Bangladesh reached up to $800 million last year. But consistent payments from the country in recent months have narrowed that gap to just 15 days of delayed payments as of analysts’ meeting in October.
Adani Group’s latest defeat in Bangladesh follows last week’s development, when the US Securities and Exchange Commission asked the federal court for permission to personally email summons to Gautam Adani and his nephew Sagar Adani, after the US market regulator claimed India’s law and justice ministry had rejected the request twice in the last 14 months. The news caused Adani Group’s shares to lose a tenth of their value on Friday, meaning the market capitalization loss was more than 100,000. ₹1.1 trillion.
On November 20, 2024, US prosecutors filed criminal charges against eight executives, alleging that $250 million in bribes were paid to unnamed Indian officials in exchange for advantageous terms on solar energy contracts awarded to Adani Green Energy Ltd and Azure Power Global Ltd, a New Delhi-based firm.
Adani Group has denied any wrongdoing and said the allegations against its executives are false.
