Mir Afroz Zaman

The Power Purchase Agreement (PPA) with India's Adani Power is facing severe scrutiny in Bangladesh's power sector, under pressure from both soaring financial costs and operational vulnerabilities.

A government-appointed National Review Committee has flagged the 2017 contract as "procedurally flawed" and exceptionally expensive. Beyond fiscal concerns, a series of recent supply disruptions due to technical faults has highlighted the risks of over-relying on a single cross-border energy source.

The deal binds the state-run Bangladesh Power Development Board (BPDB) to a 25-year commitment to buy up to 1,600 MW of electricity from Adani’s Godda coal-power plant in Jharkhand, India.

The government's review committee reports that the price of electricity imported from the Godda plant is 40 to 50 percent higher than comparable imported power from other sources.

According to the committee’s findings, Tax Burdens Passed On: In a departure from standard international practices, the burden of Indian domestic taxes has been factored into the tariff structure, inflating the cost of electricity purchased by Bangladesh.

Contractual clauses, particularly regarding coal procurement and pricing, heavily favor the investor while penalizing the BPDB.

The financial strain is further compounded by technical dependencies. A recent technical glitch at the Godda plant temporarily knocked out one of its power units, cutting Bangladesh's cross-border electricity supply by almost half.

Energy analysts and grid management experts warn that over-reliance on a massive foreign power plant introduces critical vulnerabilities to the national grid:

When a single foreign unit of this scale shuts down unexpectedly, domestic power plants must be immediately fired up to prevent grid collapse. This rapid dispatch is both operationally stressful and financially expensive."

While Bangladesh has expanded its transmission networks over the past decade, experts emphasize that the national grid still lacks the advanced real-time dispatch systems, dynamic reserve capacities, and automated load balancing required to handle sudden, large-scale fluctuations in imported power. In past years, coordination failures and weak transmission linkages have triggered major nationwide blackouts.

The government review committee noted that the PPA’s structure is fundamentally skewed. Under the existing terms, a major portion of market fluctuations, currency exchange volatility, and operational risks are absorbed by Bangladesh, whereas the investor's profits remain insulated and guaranteed.

These asymmetric terms have directly fed into the mounting losses.