Adani Group to take Bangladesh to international arbitration to extract unpaid power dues

The Adani Group of tycoon Gautam Adani is set to take Bangladesh to international arbitration over unpaid dues for power supplied from its Godda plant. The move follows Bangladesh's interim government under Muhammad Yunus refusing to clear $800 million owed to Adani Power.

Bangladesh's top court has ordered a review of the power purchase agreement signed during Sheikh Hasina's regime.

Background to the dispute

The 2017 agreement requires BPDB to pay Adani Power $800 million for the electricity supplied. Payments halted in June, leading to Adani's demand in September for settlement.

Yunus's office stated: "The committee was currently reviewing seven major energy and power projects signed during the Sheikh Hasina regime."

Arbitration proceedings

Bangladesh's High Court on 14 November ordered a review committee, but Adani proceeded to arbitration after talks collapsed.

A TBS News report stated: "Bangladesh is preparing to face an international arbitration as India's Adani Power Limited moves against the Bangladesh Power Development Board."

Adani's letter to Yunus sought intervention, but with no resolution, arbitration is now underway.

Bangladesh's court review

The Supreme Court ordered the formation of an expert committee to examine the deal's terms.

The interim government accused Adani of breaching the agreement by withholding tax payments.

A Reuters report noted: "Bangladesh's interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by withholding tax."

Economic impact and reactions

The unpaid dues total $850 million, straining Bangladesh's forex reserves.

Adani Power has reduced supply to 700 MW from 1,600 MW capacity due to non-payment.

Bangladesh's state-run power board faces financial pressure, with over $1 billion owed to Indian companies.

The Godda plant, built for export to Bangladesh, has been controversial since its inception.

Signed under Hasina, it's now under scrutiny by Yunus's administration.

Adani has paid $60 million since the interim government took over, but disputes persist.

As arbitration looms, it tests India-Bangladesh energy ties amid political changes.