When one unit of the Adani power plant in Jharkhand went offline this week, Bangladesh did not merely lose several hundred megawatts of electricity. Dhaka was reminded, once again, of a much larger problem; how much of the country’s energy security has come to depend on decisions, fuel supplies and infrastructure beyond its own borders.
The timing has inevitably invited a serious political speculation. Bangladesh’s Prime Minister Tarique Rahman has decided not to attend the BRICS outreach session in New Delhi, and the government has made clear that the invitation was extended to him in his capacity as BIMSTEC Chair rather than specifically as Bangladeshi Premier. Shortly afterwards, the Adani plant suffered a technical disruption and its output fell sharply.
But a responsible analysis requires more than that. There is no evidence that the latest technical failure was politically engineered, or that it was connected to Bangladesh’s BRICS decision. A technical failure is entirely plausible. Indeed, Adani’s supply has already been affected this year by disruptions to coal transportation in India, including railway congestion and loading restrictions. Yet, that does not make take away the politically relevance of the incident. It makes it strategically important.
The real question is not whether India switched off a power plant to pressure Bangladesh. The question rather is why a disruption at a single foreign power station has the potential to become a national-level problem in Bangladesh. This is a question of energy sovereignty.
There is nothing inherently wrong with importing electricity. Modern energy systems are increasingly interconnected and cross-border electricity trade often can lower costs, improve reliability and allow countries to use resources more efficiently. Bangladesh already benefits from electricity imports from India, and regional electricity trade could become even more valuable if it expands to include Nepal and Bhutan. The problem begins when interdependence becomes asymmetric dependence.
The Adani Deal
The Adani-Godda project is a 1,600 MW coal-fired plant, with approximately 1,496 MW contracted to Bangladesh under a 25-year power purchase agreement. The plant is connected to Bangladesh through dedicated transmission infrastructure.
On paper, that is simply a long-term electricity contract. In practice, however, it has become one of the clearest examples of the risks created when a long-term foreign supply arrangement is combined with an expensive tariff structure, imported fuel, foreign-exchange exposure and limited domestic alternatives.
The National Review Committee established by Bangladesh has concluded that the Adani electricity price carries a 39.7 percent premium over its nearest private-sector comparator. Previous reporting has also shown substantial differences between the Adani tariff, and the prices Bangladesh pays for electricity from other Indian sources.
These are not trivial differences. They go to the heart of whether Bangladesh negotiated from a position of adequate commercial strength. It sheds light on an unavoidable political fact. The Adani agreement was negotiated and signed during the Awami League regime’s long period in power. The situation therefore cannot be discussed honestly without acknowledging the responsibility of that regime for the policy choices that produced the contract. The issue is larger than Adani itself. It is more like the country’s future has been sold long term for the regime’s survival.
For years, Bangladesh pursued a power-sector model that prioritised rapid additions to generation capacity, often through long-term contracts with private producers; while weaknesses in procurement, fuel security, capacity utilisation and domestic exploration accumulated underneath the headline numbers.
The result was an extraordinary paradox; Bangladesh could have substantial installed generating capacity on paper and still experience serious electricity shortages because the system lacked sufficient fuel, transmission capability, commercially sustainable generation and dependable reserve capacity.
That was not created overnight. Nor was it created by Adani. It was the consequence of a policy architecture developed over years under the Awami League regime.
But political accountability should not become a permanent excuse. Saying that the previous regime bears responsibility does not mean every allegation surrounding the Adani agreement has automatically been proven. Claims of corruption, improper influence or criminal wrongdoing must be established through evidence and due process. And we are in luck here, as the stronger case here would be, the contract itself. It deserves rigorous economic and legal scrutiny.
The National Review Committee found significant concerns surrounding the pricing formula, coal costs, tax treatment and other contractual provisions in the contract. The government has subsequently pursued renegotiation and arbitration-related options, while disputes between BPDB and Adani have entered international arbitration processes.
On September 10, Bangladesh’s power system recorded demand of roughly 16,345 MW against supply of about 12,788 MW at one point in the afternoon, leaving more than 3,500 MW of load shedding. Adani’s contribution had fallen sharply from its normal level, while other generating units were also unavailable. It gave a harsh reality check for us; Bangladesh’s energy system has too little resilience.
The country has become exposed simultaneously to shortages of domestic gas, imported LNG prices, coal logistics, oil prices, power-plant outages, transmission constraints and international geopolitical shocks. Recent analysis suggests that Bangladesh’s dependence on imported primary energy has risen sharply, while renewable energy still represents only a small share of grid generation.
This is why arguing over Adani alone misses the larger story. Even if Bangladesh renegotiated every problematic clause in the Godda agreement tomorrow, the fundamental vulnerability would remain unless the country’s entire energy architecture became more diversified.
Energy Sovereignty
Bangladesh cannot realistically produce every unit of energy it consumes. Nor should it try. That is not what is meant by Energy Sovereignty.
Oil will continue to be imported. LNG will remain part of the energy mix. Cross-border electricity trade can be economically rational. International investment can bring capital and technology that Bangladesh needs. The objective should therefore be energy resilience, not autarky.
A resilient energy system has multiple sources of supply, multiple suppliers, domestic reserves, adequate storage, flexible generation, reliable transmission and enough spare capacity to absorb shocks.
If one supplier fails, another can step in, if global LNG prices rise, domestic gas and solar can cushion the impact, if coal logistics are disrupted other generation sources can compensate, if a power plant shuts down unexpectedly, the national grid does not immediately enter crisis. That is what sovereignty looks like in a modern energy system.
Bangladesh’s first energy priority should be at home. The government’s recent emphasis on domestic gas exploration is therefore welcome, but it comes years after the problem became obvious. The government has spoken of accelerating exploration, utilising gas from Bhola and increasing solar generation, while also looking at additional imported gas supplies. That approach should become a national energy strategy rather than an emergency response.
Bangladesh needs substantially more exploration of its own gas resources, including serious consideration of international technical and investment participation where domestic capacity is insufficient. It also needs to stop treating solar power as a peripheral environmental programme. Rooftop solar, industrial solar, utility-scale solar and battery storage should be treated as components of national energy security.
The same applies to transmission. There is little strategic value in announcing tens of thousands of megawatts of generation capacity if the country cannot reliably fuel, transmit or dispatch that electricity.
There is another opportunity Bangladesh should pursue more aggressively; regional electricity trade. India, Nepal and Bhutan possess complementary energy resources. Nepal and Bhutan have enormous hydropower capacity; India has a large and increasingly integrated electricity market, Bangladesh has a major and growing demand centre.
A properly designed regional electricity market could allow Bangladesh to purchase hydropower during periods when it is advantageous, sell or exchange power when appropriate, and reduce dependence on any single generating source.
Lessons learnt
The deepest lesson from the Adani controversy is not about one company. It is about how states make long-term decisions. A 25-year power purchase agreement can outlive governments, ministers, political parties and even economic assumptions that existed when the agreement was signed. That means such contracts cannot be negotiated as instruments of short-term political convenience. They are obligations imposed on future governments and future generations.
The Awami League regime’s handling of the power sector therefore deserves serious historical and institutional scrutiny. But the lesson for the current government should not simply be, “the previous government was corrupted and hence made bad deals.”
The lesson should rather be; Never build the next generation of state obligations without building the institutions capable of negotiating and monitoring them. Otherwise, there always remains a chance to repeat the same mistakes.
Conclusion
Bangladesh needs options for its own sake. The temptation during an energy crisis is always to search for a villain. And yes, we do have one. But countries do not become energy-secure by identifying the culprits only. They become energy-secure by creating alternatives.
The Adani plant may suffer a technical failure, Indian coal transport may be disrupted, LNG prices may suddenly rise, domestic gas field may decline, a transmission line may fail, a geopolitical crisis may interrupt shipping, any one of these events can happen without political intent. A resilient state is one in which none of them can bring the national energy system to its knees. That should be Bangladesh’s objective, a choice-rich energy system in which no single company, country, fuel, corridor or contract is indispensable.
The Adani controversy has given Bangladesh another opportunity to make that choice. The country should not waste it.
About Author:
Barrister S M Saif Kader Rubab
Executive Director, The Bangladesh Dialogue