Adani Power has formally filed international arbitration against Bangladesh to settle a long-running dispute over unpaid payments for electricity supplied under a 2017 power purchase deal.
The disagreement is over the assessment and invoicing of specific cost components under the contract between Adani Power and the Bangladesh Power Development Board (BPDB). This development comes after months of stalled negotiations and piecemeal payments, and the case is finally heading toward a formal legal resolution.
The disagreement is over payments owing for power supplied by Adani’s 1,600 MW coal-fired Godda plant in India, which serves around 10% of Bangladesh’s electricity demand. Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus since 2024, has contested the payment commitments, citing worries over contract terms and accusing Adani of neglecting to pass on tax breaks earned from the Indian government.
Bangladesh’s financial difficulties, notably a weakened foreign exchange position and high import costs, have delayed timely payments, resulting in rising debts.
Adani Power said that outstanding dues had fallen significantly — from about $2 billion in early 2025 to around $500 million more recently — as a result of partial repayments and resumed supply. Despite these financial concerns, Adani has reiterated its commitment to providing Bangladesh with reliable and reasonably priced electricity. The corporation claims that it will continue to honor its contractual responsibilities and is actively working to settle concerns through communication.
The power purchase agreement incorporated a 25-year supply arrangement inked by the previous government, led by Sheikh Hasina. The present administration is examining the deal and other comparable power agreements to ensure their financial sustainability and transparency.
Due to unresolved disputes in cost billing, both parties agreed to invoke the contract’s dispute resolution clause, resulting in the arbitration move. Bangladesh’s de facto power minister confirmed ongoing conversations and mentioned arbitration as a possible next step.
Adani’s arbitration claim mirrors broader issues in cross-border energy trade agreements, where financial, political, and contractual difficulties meet. It emphasizes the fragility of supply agreements in the face of changing political landscapes and economic pressures in emerging countries.
Arbitration is expected to provide a legally binding and impartial framework for addressing the challenged cost factors while also ensuring long-term energy cooperation between India and Bangladesh.
The disagreement is crucial in the greater context of Bangladesh’s energy sector reforms and efforts to stabilize its economy in the face of political change, with Adani seeking to protect its investments and contractual rights. Both parties continue to communicate, with the goal of finding a solution that maintains Bangladesh’s uninterrupted electricity supply while fairly addressing the financial and legal issues.
This case is expected to set precedents for future energy trade agreements between Indian enterprises and neighbouring countries, highlighting the necessity of transparent contract terms and equitable dispute resolution systems in international power supply contracts.
