The US is India’s strategic partner while Bangladesh is its closest friend in South Asia.

But while that does not stop the Biden administration from ordering investigations against the Adani Group known for close ties with Indian Prime Minister Narendra Modi, Bangladesh’s Awami League government led by PM Sheikh Hasina has pressed ahead with a power purchase deal with the Adanis despite huge criticism at home .

“Hasina did this huge unwelcome favour to the Adanis to please Modi and ensure Indian support for her government to stay in power through a very controversial election,” said Bangladesh watcher and former Indian intelligence bureau official Benu Ghosh. “India also managed to effectively lobby to ensure her daughter Saima Wajed Putul’s victory in a key election in an UN body.”

Many in Bangladesh have questioned the deal struck with Adani Power Limited ( APL) under the 2011 Indo-Bangla Framework Agreement for Cooperation on August 11, 2015 — about two months after Indian Prime Minister Narendra Modi’s maiden visit to Bangladesh– because it so obviously favours the Adanis.

Interestingly, though the deal was done in 2015, it was operationalised in June 2023 when the bells ran out and the countdown on Bangladesh parliament election began.

“It is a punishable offence to sign such a contract — we believe that our agencies have the ability to identify the corruption in this deal,” according to M Shamsul Alam vice-chairman Consumers Association of Bangladesh.

“The way I would put it is heads Adani wins, tails you lose. The contract is so biased against the interests of Bangladesh to the point that one has to wonder why any sensible person would sign it on behalf of the Bangladeshi government,” said Tim Buckley, an energy economist and founder of Sydney-based Climate Energy Finance Australasia.

Mediapersons in Bangladesh contacted Mina Masud Uzzaman, who signed the deal in his capacity as the secretary of the Bangladesh Power Development Board on November 5, 2017 to learn of the government process involved in signing the deal.

“I don’t remember anything. It came through the chairman. I was the last step,” Mina Masud told Bangladesh’s “Daily Star” newspaper.

Khaled Mahmood, who was the BPDB chairman from August 2016 to December 2019, declined to speak on the matter.

There is virtually no scope for BPDB to get out of this contract for power purchase from the plant, which was built at an estimated cost of Rs 14,816 crore on ‘unconditional and irrevocable’ sovereign guarantee from the Bangladesh government that it would purchase the entire power generated for 25 years.

“If there is a material breach, you cannot terminate the contract. You have to seek remedy and that description has to be in reasonable detail. And you have to give them time for remedy in all termination events,” a top corporate lawyer in Bangladesh, who specialises in drafting infrastructure contracts, told the ” Daily Star”.

And even in the case of dispute resolution, the government has conceded ground by waiving off sovereign immunity, which would have given it an upper hand.

“It’s a plain unfair contract. This is an agreement against public policy,” said the lawyer on the condition of anonymity fearing vendetta from the government.

The agreement means Adani Power has passed on the entire risks associated with its fixed and variable costs of the power plant, which was set up on a 68:32 debt-to-equity ratio, to BPDB and also line its pockets along the way.

In fact, this is the only PPA of Adani Power in which all variable costs are pass-through, making it a largely low-risk venture for India’s largest private power company.

Major predatory aspects of the PPA with Adani Power, whose chairman Gautam Adani has longstanding ties with Modi, can be found in the pricing of coal and capacity charge.

Coal that would fire the 1,600 megawatt ultra-supercritical power plant located in the Indian eastern state of Jharkhand’s Godda district would be calculated based on the average prices of benchmark coal with an energy value of 6,332 kilocalories per kg (kcal/kg) at the Indonesian coal index and the Australian Newcastle index for the relevant month.

“That means if Adani purchased coal from countries other than Indonesia and Australia at a lower cost, they would be able to charge extra,” said M Shamsul Alam, an energy expert who reviewed the 163-page........

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