Adani Power Moves Toward International Arbitration Over Bangladesh Payment Dispute

Nov 2025 : Adani Power announced on Monday that it has initiated an international arbitration process to resolve a growing dispute with the Bangladesh Power Development Board (BPDB) over outstanding payments for electricity supplied under a 2017 power purchase agreement (PPA). The disagreement centers on how certain cost components are calculated and billed.

In a statement, an Adani Group spokesperson said, “There are disagreements in the way certain cost elements are calculated and billed. Hence, both partners have agreed to invoke the dispute resolution process and are confident of a quick, smooth and mutually beneficial resolution.”

However, Bangladesh’s de facto power minister, Muhammad Fouzul Kabir Khan, told Reuters that negotiations are still underway. “Once that process is over, we will move toward international arbitration, if needed,” he said, indicating that arbitration may not be immediate.

Adani Power supplies electricity to Bangladesh from its 1,600-megawatt coal-fired Godda power plant in eastern India. The plant plays a critical role in Bangladesh’s energy ecosystem, meeting nearly 10 percent of the country’s total power demand. The dispute adds pressure to Bangladesh’s struggling power sector, which has been grappling with rising fuel costs, foreign exchange shortages, and delays in settling dues with international suppliers.

Tensions escalated after Bangladesh’s interim government accused Adani Power of violating the PPA by withholding tax benefits granted to the Godda plant in India—an allegation reported by Reuters in December. Cost concerns have also been raised, as Bangladesh paid a tariff of 14.87 taka ($0.1220) per unit to Adani during the fiscal year ending June 30, 2024—significantly higher than the average 9.57 taka paid to other Indian power suppliers.

Despite the dispute, Adani Power recently reported a sharp reduction in Bangladesh’s outstanding power dues, which have now fallen to the equivalent of just 15 days of tariff payments. This marks a significant improvement from the nearly $900 million owed in May and the almost $2 billion outstanding earlier this year.

Reaffirming its position, the company said, “Adani Power remains committed to the power purchase agreement and will continue to support Bangladesh by supplying reliable, cost-competitive, and high-quality power.”

As negotiations continue, the future of one of South Asia’s largest cross-border energy partnerships now hinges on the outcome of the dispute-resolution process.