Test transmission of power supply from Adani's 1,600MW coal-fired power station in the Indian state of Jharkhand to Bangladesh started at 7:38pm on Thursday although issues of power tariff are yet to be resolved.

According to a Power Grid Company of Bangladesh (PGCB) Facebook status, the electricity transmission was synchronised with Bangladesh's national grid on a test basis.

"More or less 50 MW of electricity from the Adani plant entered Bangladesh at 9pm for the national grid through newly built transmission lines and substations," the PGCB said.

The company said it built a 134km 400kV transmission line, from the bordering Mankasha area through Rohanpur to Bogura. "Also, a 400/230kV substation was installed at Bogura to facilitate the evacuation of power."

Electricity from Adani Power has started coming to Bangladesh at a time when the country has surplus electricity. But many power plants remained non-operative due to lack of gas and liquid fuel.

The recent dollar crisis has made the situation tougher as the government had to suspend diesel-fired plants' operation.

But due to the obligation of the power purchase agreement (PPA) the BPDB has to receive electricity from Adani despite the higher tariff, said a top official at the Power and Energy Ministry.

Earlier, the 104 km Bogra (West) to Rohanpur 400 kV grid transmission line and substation was ready to carry electricity from Adani Power's 1,600 MW thermal power plant in Godda district of Indian state of Jharkhand.

“Our transmission line and associated substations are ready for operation. We’ve been conducting some test runs of the installations,” said Md. Alamgir Hossain, the project director of the Southwest Transmission Grid Expansion Project.

According to official sources, the Power Grid Company of Bangladesh (PGCB) has implemented the project with the financial support of the Asian Development Bank (ADB) at a total cost of Tk 3273.78 crore. The Bangladesh government and PGCB are also financing the project.

Recently, dismissing any uncertainty over the Adani power’s availability to Bangladesh national grid, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the electricity from the Jharkhand power plant will be added to the national grid in March as per the agreement.

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

A highly placed source at the BPDB said that the organisation sent a letter dated January 23 referring to the State Minister-led delegation’s recent visit to the Adani plant mentioned, “During the discussion your side also opined that suitable mechanism will be devised to reduce this inconsistency of coal price by adjusting/changing the coal pricing mechanism of the power purchase agreement (PPA)”.

However, Nasrul Hamid said the tariff of Adani's power will be competitive compared with other coal-fired plants like Payra power plant.

However, a team of Adani Power came to Bangladesh on February 23 and discussed tariff related issues following state-owned Bangladesh Power Development Board’s request for revising the power tariff through “adjusting/changing the coal pricing mechanism of the power purchase agreement (PPA)”.

A number of BPDB officials told UNB the Adani’s power tariff might be between Tk 20-22 per kilowatt hour (each unit) because of the absence of a provision for discounts on the purchase of coal in the PPA signed with Adani Power that allowed the Indian firm to quote such a steep bill for the coal.

The absence of such a provision is all the more notable since it was made mandatory in the PPAs for thermal power plants signed with other independent power producers, domestic or foreign. In these PPAs, the price of coal to be purchased as primary fuel was kept as “pass-through”.

Officials said that they have been working on a number of alternatives to offer Adani so that its coal price could be reduced to ultimately lower the power tariff.

"If Adani's power tariff is not competitive, it would be difficult for BPDB to keep it on the merit list to take its electricity for the national grid,” said another top BPDB official.