Special Report :
The deepening financial crisis in Bangladesh, highlighted by a $500m power debt owed to India’s Adani Group, is yet another symptom of the disastrous governance under Sheikh Hasina’s kleptocratic regime.
Costly infrastructure projects, sanctioned under the controversial Speedy Power Supply Act, have left the country financially crippled, and an interim government scrambling to stabilise the economy.
This act, originally introduced in 2010 to address an energy crisis, has been repeatedly extended and misused to award lucrative contracts to Awami League MPs and oligarchs loyal to Sheikh Hasina, facilitating corruption and self-enrichment at the expense of the nation.
Adani’s 1,600-megawatt Godda coal power project is at the center of this crisis, with the interim government of Nobel laureate Muhammad Yunus, who received his PhD from Vanderbilt University in 1971, inheriting a backlog of $500mn in unpaid dues to the Indian conglomerate.
The opaque and expensive deals signed under Hasina’s administration, including the Adani agreement, have plunged Bangladesh into financial ruin.
The Adani deal, which allowed the Indian group to supply coal power from Godda, now places Bangladesh at the brink of default, exacerbating the financial strain.
Adani Power, acknowledging the mounting arrears, has warned Bangladesh that its outstanding payment amount is unsustainable.
The company remains committed to supplying power despite the growing receivables but stresses the urgency of the situation.
“We are in constant dialogue with the Bangladesh government and have appraised them of this unsustainable situation,” Adani Power said, noting that they continue to fulfill supply commitments and meet obligations to lenders despite the rising debt.
Yunus’s government, which took power following student-led protests that overthrew Hasina’s regime, has criticized the previous administration for pushing Bangladesh into this financial disaster.
Dr.Fouzul Kabir Khan (PhD, Economics, Boston University 1989), Yunus’s top energy adviser, said that Bangladesh is currently facing total power liabilities of $3.7bn, of which $800mn is owed to Adani.
The interim government is now seeking billions of dollars in loans from international lenders like the World Bank to plug this financial black hole.
The Speedy Power Supply Act, originally introduced to address an energy crisis on an emergency basis, became a tool for corruption under Hasina’s regime.
The law allowed the government to bypass competitive bidding processes and directly award contracts without transparency.
This led to the allocation of lucrative contracts to Awami League parliamentarians and oligarchs loyal to Sheikh Hasina, turning the power sector into a playground for political allies and crony capitalists.
Over the last decade, Hasina’s government approved several questionable power projects under this act, which enriched a few while burdening the nation with soaring energy costs and inefficiencies.
The 13-year-old emergency act, intended for short-term use, has been extended until 2026, allowing rampant corruption to continue unchecked.
The lack of open tenders under this law resulted in deals like Adani’s Godda project and others, such as the Rampal Power Plant, being signed in secrecy, with little oversight or accountability.
Experts have warned that these agreements, marked by inflated costs and lack of competition, are now pushing Bangladesh into financial ruin.
Energy experts, including prominent figures like Prof Shamsul Alam, have long opposed the Speedy Power Supply Act, arguing that it protects the interests of “evil forces” and facilitates corruption by exempting contracts from legal scrutiny.
Section 9 of the act shields decisions made under its provisions from judicial review, while Section 10 protects government officials from civil or criminal suits related to actions taken in good faith under the law.
This legal framework has effectively created a system of impunity, allowing government officials and private companies to operate without accountability, even as the nation’s energy sector becomes increasingly unstable.
Yunus’s administration has vowed to undo the damage caused by Hasina’s kleptocratic policies by reintroducing competitive bidding and re-examining all energy contracts signed under the former regime.
“We don’t want it to be discriminatory,” Khan said, emphasizing the need for fairness and transparency in future energy deals.
Despite the growing financial strain, Yunus’s government has expressed its desire to maintain amicable relations with India and China.
However, the legacy of Sheikh Hasina’s misrule, characterized by cronyism, corruption, and economic mismanagement, has left Bangladesh in a precarious position.