Special Report :
In the intricate web of South Asian geopolitics, economic projects often intertwine with political alliances, shaping the course of relationships between political parties across borders.
One such connection is the close relationship between Indian Prime Minister Narendra Modi and Bangladesh’srecently ousted ex-PM Sheikh Hasina.
At the heart of this bond lies the 1600 MW GoddaPower Plant project by Adania conglomerate with deep ties to Modi’s political trajectory.
The project is physically located in Jharkhand, India, but supplies electricity to Bangladesh’s national grid.
The honeymoon, however, turned sour once Bangladesh started failing to keep up with making fuel payments and capacity charges for the power plant due to a severe foreign currency crisis in the country, for which Bangladesh turned to the IMF for urgent financial assistance.
Currently, as per the latest data collected by The New Nation, Bangladesh is four months behind in making payments to the Godda project. Sensing trouble, the Modi government took action this month to ensure the survival of the project.
According to an August 12 memo from India’s federal power ministry, the 2018 guidelines for power plants dedicated to supplying electricity solely to neighboring countries have been revised.
Adani Power’s 1600 MW coal-fired plant, initially contracted to supply all of its electricity to Bangladesh, can now also sell power domestically in India.
This shift in India’s power export regulations reduces the company’s dependence on Bangladesh, providing a buffer against potential political risks in the country.
A year before Sheikh Hasina was ousted in a student uprising, Modigovernment lobbied the U.S. to reduce its pressure on her government. U.S. diplomats had criticized Hasina’s autocratic rule and threatened sanctions over human rights abuses, but Indian officials argued that allowing the opposition to gain power would destabilize Bangladesh and pose security risks for India according to a report published on the Washington Post on August 15, 2024.
Effectively, the Modi government claimed that any other party assuming power in Bangladesh will turn the country into a breeding ground for Islamic terrorists.
The article further states that the Biden administration ultimately softened its stance, disappointing many in Bangladesh.
After Hasina was forced to flee, both New Delhi and Washington faced criticism for their long-standing support of her regime, raising questions about whether they mishandled Bangladesh.
Modi’s all-in bet on Hasina, which spanned over a decade, has drawn scrutiny, especially after she claimed victory in a one-sided election with Indian endorsement.
The Godda power plant in Jharkhand, India, is a flagship project for Adani Power and is deeply connected to Bangladesh’s energy needs.
Operationalized in June 2023, just as Bangladesh’s parliament election countdown began, the project highlighted the economic ties between the two nations.
The Bangladesh Power Development Board (BPDB) has committed to purchasing the entire power output from the plant for the next 25 years under an ‘unconditional and irrevocable’ sovereign guarantee.
This deal, which was initiated in 2015, finally came into effect in 2023, raising questions about its timing and political implications.
The terms of the Power Purchase Agreement (PPA) have sparked controversy, particularly regarding the pricing of coal and the capacity charges. Coal for the Godda plant is priced based on benchmark indices for higher-grade coal, despite the plant using lower-grade coal.
This pricing structure allows Adani Power to charge BPDB at a premium, even though the coal being used is of inferior quality.
Energy experts have described the PPA as one of the most generous coal agreements globally, benefiting Adani Power at the expense of the Bangladeshi government.
Narendra Modi’s rise in Indian politics is inseparable from his tenure as the Chief Minister of Gujarat, where his infrastructure projects provided a platform for the growth of major companies, including Adani Enterprises Ltd.
Under Modi’s leadership, the Gujarat model became synonymous with rapid industrial development, benefiting corporations like Adani.
When Modi transitioned to national leadership in 2014, Adani’s wealth tripled, underscoring the symbiotic relationship between political power and corporate growth.
This relationship, however, has not been without controversy. During election campaigns, Modi’s opponents have frequently pointed out his close ties with the country’s billionaires, particularly Gautam Adani.
The opposition’s claims gained traction when Modi accused them of receiving illegal funding from Adani, signaling a shift in political tactics amid low voter turnout.
Despite these allegations, the bond between Modi and Adani remains strong, as evidenced by major projects like the Godda power plant, which ties directly to Modi’s support for Sheikh Hasina’s government in Bangladesh.
For Sheikh Hasina, maintaining this close relationship with Narendra Modi was not just a matter of economic necessity but also of political survival. India’s influence in Bangladesh’s domestic affairs has been well-documented, with the Modi government lobbying U.S. counterparts to tone down criticism of Hasina’s government, particularly regarding human rights abuses and democratic backsliding.
The Modi government has argued that Bangladesh’s stability is crucial for India’s national security, particularly in preventing the rise of Islamist groups.