THE agreement with India鈥檚 Adani Power by way of which it supplies Bangladesh with power from a 1.6GW Godda plant built in the Indian state of Jharkhand exclusively for the purpose has aired fresh fears as the Power Development Board has estimated that it owes Adani $547 million, about 32 per cent less than what the Indian entity has claimed. The Adani Group that owns Adani Power, as Indian media reported on September 10 which Bangladesh authorities have also confirmed, has written to the chief adviser to the interim government of Bangladesh in August seeking an intervention in the clearance of $800 in outstanding power bill. The power board says that the agreement, which brought Adani to Bangladesh鈥檚 power scene in 2023 under the patronisation of the deposed prime minister Sheikh Hasina, allows price manipulation and overpricing. Whilst the power board is reported to be writing to the chief adviser to the interim government on Bangladesh鈥檚 position on the agreement, the adviser on power, energy and mineral resources says that a special committee was evaluating all power and energy agreements, including the one with Adani, that were signed during the 15 years鈥� tenure of the Awami League government, overthrown on August 5 amidst a student-mass uprising.
The agreement has allowed Adani to generate power from coal carrying a calorific value of 4,600 kcal/kg but charge Bangladesh for the use of coal carrying 6,322 kcal/kg in calorific value. This comes down to the use of low-value coal for the payment of high-value coal. Besides, the agreement has allowed Adani to charge Bangladesh an average of coal prices on the Indonesian Index, in which a tonne of coal in the range of 4,200 kcal/kg鈥�6,500 kcal/kg costs in the range of $51.18鈥�$127.72, and the Australian Index, which is of very high quality and is more expensive, to inflate its profit although Adani sources its coal for the plant entirely from Indonesia. The provision for averaging the combined prices of coal is unique to the Godda project as no other similar plants have been given such privilege. The agreement, thus, allowed Adani to charge Bangladesh 60 per cent higher than the actual market price in 2023. Adani in February demanded about $400 for a tonne of coal although it was available for $250. The agreement also has no provision for discount, which is up to 55 per cent globally, in the case of a sudden increase in coal price as is the case with the 1.2GW Payra plant. Adani, which has invested an estimated $2 billion in the Godda plant, is reported to be getting its investment returns in six years and the capacity charge in the deal would earn Adani some $12 billion more in its 25-year lifetime.
Bangladesh鈥檚 installed power generation capacity is about 2.78GW, but it struggles to generate even 1.3GW, with a burdening overcapacity and consequent capacity charge payment. The interim government must, therefore, move back on the Adani power purchase agreement and, rather, improve on the use of generation capacity after a thorough review of the power and energy situation.
