Dispute Filed at London Court of International Arbitration Amid Payment Halt and Political Turmoil
In a major international development, Adani Power Ltd., one of India’s leading private power producers, has initiated arbitration proceedings against Bangladesh Power Development Board (BPDB) over unpaid bills amounting to more than $850 million (approximately ₹7,100 crore). The company filed the case on November 3, 2025, at the London Court of International Arbitration (LCIA), aiming to resolve long-standing disputes tied to a 2017 power purchase agreement (PPA).
The Core of the Dispute: A 2017 Power Deal Turned Contentious
The disagreement stems from a power purchase agreement signed in 2017, under which Adani Power’s 1,600-megawatt Godda plant in Jharkhand, India, supplies electricity to Bangladesh. The Godda plant, a flagship project of the Adani Group, provides roughly 10% of Bangladesh’s total electricity consumption.
However, payment disruptions began following Bangladesh’s deepening foreign exchange crisis and political instability after the ouster of Prime Minister Sheikh Hasina in August 2024. The country’s interim government has since been reassessing major international energy deals for potential irregularities and cost escalations, including Adani’s contract.
Adani Seeks Resolution While Ensuring Continued Power Supply
Despite the financial strain, Adani Power has emphasized its commitment to maintaining electricity supply to Bangladesh during the legal process. The company has stated that its priority remains ensuring energy stability and regional cooperation, even as it seeks a fair resolution through arbitration.
An Adani Group spokesperson said (in a statement shared with Indian media),
“Adani Power remains committed to upholding its contractual obligations while pursuing legitimate claims through internationally recognized legal frameworks. Our goal is to resolve all disputes transparently and maintain uninterrupted power delivery to Bangladesh.”
Bangladesh’s Interim Government Reviews Energy Contracts
On the other hand, Bangladesh’s interim government has been conducting a review of all major energy agreements, including those signed with foreign companies, amid allegations of overpricing and corruption during the previous administration. The Godda PPA, which initially faced domestic criticism for its pricing formula and import-dependence on Indian coal, is reportedly under close scrutiny.
Sources within Bangladesh’s Ministry of Power indicated that no immediate decision has been made regarding the potential cancellation of the Adani deal, though “all options remain open” as the country faces mounting fiscal challenges and rising public pressure.
A Broader Context: Power Diplomacy and Regional Energy Security
The Adani-Bangladesh case has broader implications for South Asian energy cooperation. India and Bangladesh have long maintained energy trade ties, with several cross-border transmission projects enhancing grid connectivity.
Experts believe that a prolonged legal standoff could disrupt future investment confidence, especially in bilateral energy projects and regional power integration initiatives.
Energy analyst Rohit Mehta commented:
“This arbitration goes beyond unpaid bills it’s a stress test for regional power diplomacy. Both sides must balance commercial interests with long-term energy security and diplomatic goodwill.”
Financial and Operational Stakes
Adani Power’s Godda project, which began commercial operations in 2023, was built primarily to export power to Bangladesh under a 25-year supply agreement. The plant, using imported coal, is one of the largest private sector energy export projects in South Asia.
The $850 million unpaid amount reportedly includes outstanding energy bills, capacity charges, and disputed cost calculations linked to fuel price fluctuations and exchange rate differentials. The matter’s outcome could significantly affect Adani’s balance sheets and investor sentiment, especially given the company’s expanding energy portfolio across Asia.
Legal Proceedings and Possible Outcomes
The arbitration at the London Court of International Arbitration is expected to take months, if not years, to conclude. Under international arbitration norms, both parties will present evidence and arguments before a neutral panel of experts.
Possible outcomes include:
- Full or partial payment directive to Bangladesh.
- Settlement negotiation between the two sides.
- Revised pricing or contract restructuring.
- Termination of agreement if mutually decided or found invalid due to corruption.
Legal experts suggest that Adani Power’s decision to approach the LCIA underscores its intent to safeguard investor confidence and maintain credibility in global markets.
Economic Ripples in South Asia
Bangladesh, already grappling with foreign currency shortages and rising inflation, faces an increasingly complex energy landscape. The country’s reliance on imported coal and LNG has strained its reserves, leading to rolling blackouts and industrial slowdowns.
The arbitration could further strain Dhaka’s financial obligations, especially as international lenders like the IMF push for greater transparency and fiscal discipline. Meanwhile, India’s energy exporters are watching closely, given that the outcome could set a precedent for future cross-border energy contracts.
Adani Group’s Expanding Global Footprint
The Adani Group, led by billionaire Gautam Adani, has been aggressively expanding its energy and infrastructure footprint beyond India. Its operations span power generation, transmission, ports, logistics, and renewables. The Godda project was seen as a symbol of India’s growing energy cooperation with neighboring nations.
Despite recent geopolitical and economic challenges, the Adani Group continues to maintain that its projects adhere to global compliance and transparency standards.
Arbitration as a Test of Trust
The ongoing arbitration between Adani Power and the Bangladesh government represents a critical juncture in India-Bangladesh economic relations. While legal outcomes remain uncertain, the episode has highlighted the fragility of cross-border energy dependencies amid shifting political and financial realities.
Both sides now face the challenge of ensuring that legal disputes do not compromise energy stability a key pillar of South Asia’s developmental and diplomatic agenda.
The Adani Power vs. Bangladesh arbitration marks one of the most high-profile international disputes in South Asia’s power sector. As proceedings unfold in London, stakeholders across the region will be closely monitoring the case’s outcome, which could shape future cross-border energy agreements for years to come.
While Adani Power continues to supply electricity to Bangladesh, the company’s legal action signals a firm stance on contractual enforcement and a reminder that even the most strategic partnerships must withstand the tests of politics, payment crises, and public scrutiny.
