Bangladesh seeks revised agreement with Adani before importing power

Bangladesh government has sought a revision to the power purchase agreement it signed with Adani Power Ltd for importing electricity from its thermal power plant in Jharkhand of India.
Bangladesh Power Development Board, the government agency tasked with overseeing the development of the country’s power sector, has already sent a letter to the Indian company in this regard, according to officials familiar with the deal.

It seems the price of coal to be purchased as fuel for the project has emerged as the prime bone of contention.

‘We have sent a letter to the Adani Group following a request we received in relation to opening LCs (in India) to import the coal that will be used as fuel for the 1,600 MW plant in Jharkhand,’ a highly-placed official of BPDB told United News of Bangladesh, in return for anonymity to discuss the sensitive matter.

Since practically all the power generated by the plant located in the Godda district of Jharkhand state will be exported to Bangladesh, Adani Power requires a demand note from BPDB that it can present to Indian authorities before opening LCs against the coal import.

The cost incurred to import the coal, including transport from port to plant, will ultimately be borne by Bangladesh, with the price factored into the PPA’s tariff structure.

Adani Power recently sent a request for BPDB to issue the demand note, where the coal price is quoted at US$ 400 per MT - far above what BPDB officials believe it should be given the present state of the international market.

“In our view, the coal price they have quoted (US$ 400/MT) is excessive - it should be less than US$ 250/MT, which is what we are paying for the imported coal at our other thermal power plants,” the official said.