The government of Bangladesh urgently needs to review the deal with India’s Adani Group, for the sake of the power sector in the current cash crunch. Most officials of the state-owned Bangladesh Power Development Board (BPDB) strongly believe this, noting that the government needs to pay $100 million every month to import electricity from the Adani power plant in Jharkhand. “If the Adani deal is reviewed, and the tariff is reduced, the government can save upto 50 percent of the money it now pays to Adani,” a senior BPDB official told UNB, requesting anonymity as the issue is highly sensitive. The government signed a 25-year power purchase agreement (PPA) in November 2017 with Adani Power under an unsolicited offer, to buy electricity from its 1600 MW power plant in Godda of Jharkhand. It started importing electricity from the plant in April 2023. Besides the Adani plant, Bangladesh has also been importing about 1160 MW of electricity from India, of which about half is from the Indian private sector and the other half through the government arrangement. All are from coal-fired, or thermal power plants. Read more: No reason to get affected ties with India: Foreign Affairs Adviser BPDB officials said currently this import costs about Tk 5.50 per unit (kilowatt hour) from Indian state-owned plants, Tk 8.50 per unit from Indian private sector while Adani’s power costs about Tk 15 per unit. “It means import of electricity from Adani’s power plant costs almost double compared with the average cost of the import under the Indian government’s arrangement,” said the BPDB official. If the government wants to review the deal, this is the time to do the job, he added, saying that the review will bring huge financial benefits for Bangladesh. Many energy experts in Bangladesh have also been criticising Adani's deal. They said that currently, the BPDB needs to pay over $1.2 billion a year and over 25 years, the payment will be $30 billion. If the deal is reviewed, and the tariff is halved, the BPDB can save $15 billion in 25 years. At present, the outstanding bills of the BPDB amount to Tk 45,000 crore because of its purchase of electricity from the private sector and also import from India at a higher rate. Read more: Adani Group seeks new investment opportunity in Bangladesh Energy expert and vice president of Consumers Association of Bangladesh (BPDB) M Shamsul Alam said that the government should immediately take measures to review all unsolicited deals, including Adani’s one. Sources said that after huge criticism in Bangladesh, last year the Adani Group agreed to reduce the power tariff in exporting electricity. But the arrangement was made on an ad-hoc basis and every month the BPDB has to negotiate with the Indian company to set the power price. “But we need a permanent solution to this deal through a review,” the senior BPDB official told UNB.

Though commercial operation of Adani Power’s Godda Jharkhand plant started on April 7 to import about 800 MW of electricity by Bangladesh, the tariff dispute has not been settled yet. Initially, Adani started its power export to Bangladesh on March 9 on a test basis.   According to official sources, state-owned Bangladesh Power Development Board (BPDB) approved a commercial operation date (COD) following its inspection by a 3-member technical team, headed by a superintendent engineer (energy audit). “The technical team went to India in the third week of March and returned home in the first week of April spending about 10 days in Apani’s Godda power plant,” a source told UNB on condition of anonymity as the issue is highly sensitive. “But the issue of the tariff was not settled. After objection from the Bangladesh side, the Adani Power offered to lower the coal price, still it is not complying with Bangladesh’s stand,” he said. He mentioned that Adani uses GAR of ICI-5000 coal which is low quality coal, but wants to quote the price GAR of ICI -6500. “For instance the price of an ICI-6500 is $179.84, while the price of ICI-5000 is $95.50. In this case, Adani is seeking to quote the coal price at $179.84 which is not acceptable to Bangladesh,” he added.     He also mentioned that following the recent discussion between Adani and BPDB in Bangladesh, Adani has agreed to lower the price and wanted to keep it between the tariffs of Payra power plant and Rampal power plants. “But they don’t stick to a certain formula of coal pricing which is problematic for Bangladesh as every month BPDB will have to negotiate with Adani on the tariff issue which is not desirable for Bangladesh”, said the senior official of the BPDB. Earlier, a high level team of Adani Group came to Dhaka on February 23 and discussed resolving the issues on "coal pricing mechanism of the power purchase agreement (PPA)”. Both the sides heard each other and they presented their points in favour of their respective sides on the issue. Adani's representative informed them that they would communicate BPDB's stance on the coal pricing mechanism of the PPA to their top management and they will sit in more follow-up meetings. Read more: Adani Group starts discussion with Bangladesh to resolve issues on coal pricing The visited Dhaka as the Bangladesh government sought a revision to the power purchase agreement (PPA) it signed with Adani Power Ltd for importing electricity over a 25 years of period from its thermal power plant in Jharkhand, India. It seems the price of coal to be purchased as fuel for the project has emerged as the prime bone of contention. The BPDB sent a letter to the Adani Group following a request it 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 UNB. 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. At that time when a huge volatility was prevailing on the global market with soaring fuel price, Adani Power recently sent a request for BPDB to issue the demand note, where the coal price is quoted at $400 per metric ton (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 ($400/MT) is excessive - it should be less than $250/MT, which is what we are paying for the imported coal at our other thermal power plants," the official said. The BPDB official referred to the coal procurement of Rampal Power Plant where the supplier Bashundhara Group won the contract to supply coal at $232.33 per ton to reach the product to the jetty. However, later the coal price declined substantially.   The same sources also said Bangladesh’s stance on the issue was communicated to Adani Power officials during the visit of a delegation led by State Minister for Power, Energy and Mineral Resources Nasrul Hamid to the site of the power plant that took place in the first week of January.