The 104 km Bogra (West) to Rohanpur 400 kV grid transmission line and substation is ready to carry electricity from Adani Power's 1,600 MW thermal power plant in Godda district of Indian state of Jharkhand, although the issue of revising the tariff structure, that the government of Bangladesh is belatedly pursuing, is not settled yet with the Indian company. “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 been implementing 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.     Read More: Why we take power from India’s Adani Group at higher prices, questions MP Chunnu The electricity from Adani Group will enter Bangladesh through a 26 km line from Bangladesh border to Rohanpur and then it will come to Bogura grid substation.   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 is quoted at $400 per metric ton - far above what BPDB officials believe it should be given the present state of the international market. Read More: Adani Power team likely to visit Bangladesh to discuss coal price, power tariff  A highly placed source at the BPDB said that the organisation sent a letter date January 23 referring to 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)”. Nasrul Hamid said the tariff of Adani's power will be competitive compared with other coal-fired plants like Payra power plant. However, official sources said BPDB is yet to receive any official reply from the Adani Group on its request for revising the power tariff through “adjusting/changing the coal pricing mechanism of the power purchase agreement (PPA)”. Read More: BPDB seeks revised agreement with Adani before importing power from Jharkhand plant “A representative has informed us that a high level team will visit Bangladesh soon to discuss the coal price and power tariff issue,” he told UNB on condition of anonymity.   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. Adani Power recently sent a request for BPDB to issue the demand note, where the coal price is quoted at $400 per ton -- far above what BPDB officials believe it should be given the present state of the international market. Read More: The Tk 700 crore per month hole in the deal with Adani Power  “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 BPDB official said. 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”. Read More: Adani’s 750 MW power to come to national grid in March: Nasrul Hamid 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.

The government has sought a revision to the power purchase agreement (PPA) it signed with Adani Power Ltd for importing electricity from its thermal power plant in Jharkhand, India.  Bangladesh Power Development Board (BPDB), 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 UNB, in return for anonymity to discuss the sensitive matter. Read: BPDB staring at 80% jump in annual losses after gas price hike 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 $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. Read: The Tk 700 crore per month hole in the deal with Adani Power 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. Publicly however, the state minister gave no indication of any such issue during the visit, instead telling reporters that Bangladesh would start importing the power generated by one of the two units at the plant, some 750 MW, from March. The subsequent letter counts as BPDB’s formal request for the PPA to be reviewed and tariff structure to be adjusted before it can start importing the electricity, officials said. No discounts, please? A number of BPDB officials told UNB it was 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. Read: CPD raises question about power tariff enhancement proposal 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”. The PPA with Adani Power was signed in November 2017, in Dhaka. Then-Power Division Joint Secretary Faizul Amin, BPDB secretary at the time Mina Masuduzzaman and Adani’s Business Development President Kandarp Patel signed two documents - the PPA and an Implementing Agreement - on behalf of their respective sides. Interestingly, reports in Bangladeshi media from the time suggest the agreement had to be rushed through in the end, on the insistence of the Indian company. A date proposed by the Power Division had to be brought forward, reported Energy and Power magazine, as the Indian company ‘was insisting to sign the deal earlier’. Most of the top and senior officials of the Power Division were unable to attend, the report adds. Did this rush to sign ‘ahead of schedule’ in the end cause the absence of the discount provision to be missed? Read More: Power tariff further raised at both bulk and retail levels, effective from tomorrow Incidentally the coal for the project, it is now known, will be purchased from the Adani-owned Carmichael mine in Queensland, Australia. Normally, the price of coal is calculated on the basis of the Newcastle Price Index, with purchases of high quantities or with higher calorific values enabling the buyer to avail discounts of upto 55 percent on the bulk value. For example, the provision is present in the PPA for the 1320 MW Payra power plant, a Bangladesh-China  joint venture where BPDB is benefiting from discounts on coal purchases. The amount of coal required to operate these plants typically runs into the millions of tonnes.  The annual requirement of coal for the Godda plant is estimated to be 7-9 million tonnes. But given the omission of a discount provision, Bangladesh will ultimately end up paying Adani Power Tk 20-22 per unit of electricity, once all the hidden costs are piled on top of the tariff. Read More: Retail gas prices hiked for power plants, industries and commercial users with effect from Feb 1 "Compare that to the price it pays for the electricity bought from coal-fired plants in Bangladesh, which is below Tk 12 per unit," the senior BPDB official said. He and others insist that if Adani doesn’t agree to adjust the pricing mechanism for coal in the PPA, it would be simply unviable for Bangladesh to import power from the Godda power plant. As per Power Division documents seen by UNB, Bangladesh would be paying Adani Power an estimated $23.87 billion, equivalent to almost Tk 240,000 crore (considering US dollar exchange rate at Tk 100), over the 25-year life cycle of the plant, if the PPA remains unchanged. Adani Power’s investment in the plant, including transmission lines till the Bangladesh border, have been estimated at around $2.1 billion. Read More: Adani’s 750 MW power to come to national grid in March: Nasrul Hamid

The electricity of Indian Adani Group’s Jharkhand power plant will cost Tk 22 per unit as import to Bangladesh is expected to start from March this year, according to a Power Division media statement issued on Tuesday (January 03, 2023).  State Minister for Power, Energy and Mineral Resources Nasrul Hamid visited the Jharkhand power plant on Tuesday. Power secretary Habibur Rahman and BPDB chairman Mahbubur Rahman accompanied the state minister during the visit. During the visit, Nasrul told reporters that Bangladesh will receive the electricity from March this year for which a dedicated transmission line has been installed. Read more: The Tk 700 crore per month hole in the deal with Adani Power “Power import from the Adani’s Jharkhand plant will be possible from March”, a Power Division media statement quoted him as saying.  “Initially we’ll get about 750 MW from the plant. We need more electricity to meet our demands in the coming summer”, it said.  Adani's Jharkhand coal-fired power plant will have a total of 1,600 MW capacity from two units, each having 800 MW. “We’re looking for alternative sources of energy. We’ve been working giving priority on uninterrupted power supply at affordable prices”, Nasrul said.  Read more: Introduce smart management system in power grid: Nasrul Hamid The Adani Group, very close to Indian Prime Minister Narendra Modi, set up the 1600 MW power plant in India’s eastern state of Jharkhand under a deal signed on November 5 in 2017 to export its entire electricity to Bangladesh. Power Grid Company of Bangladesh (PGCB) constructed two substations at Chapainawabganj and Bogura in Bangladesh and also a transmission line to import the electricity. Meanwhile, officials of the BPDB are concerned about the tariff of the imported electricity from the Jharkhand plant as its cost will be almost double of the electricity to be generated from locally installed Payra power plant, a joint venture of Bangladesh and China. They said Bangladesh will incur a huge financial loss to the tune of about Tk 700 crore per month, once it starts importing electricity from the Adani 1,600 MW thermal power plant in Godda, Jharkhand state - due to the ‘flawed’ deal the government signed with the private Indian company. Read More: Pay production cost to get smooth supply of gas, electricity: PM Hasina tells industries “Including the cost of coal and its transportation, we have to pay Tk 2,100 crore per month to import 1,600 MW from Adani's plant at a 75 percent plant factor considering the existing rates of coal in the international market," a top official of the state-owned BPDB told UNB. If some rules and provisions observed in other similar deals (from the private sector, coal-fired) had been maintained here, the cost could have been kept down to Tk 1400 crore per month. The country has to count a loss of about Tk 700 crore per month, working out to Tk 8400 crore annually for the flaws in the deal, he added. Over the project’s life cycle of 25 years, the loss in terms of the increased cost and hidden components in the tariff Bangladesh will ultimately incur Tk 2.10 lakh crore - a third of the national budget - considering the current coal price, the senior official noted.   The BPDB official said the lack of a provision for discounts in the purchase of the coal that will be used to fuel the plant is an oversight, considering such a provision was made mandatory in other deals that Bangladesh signed with independent power producers (IPP), where the price of coal to be purchased was kept as “pass-through”. Read More: Ensuring access to electricity at an affordable cost is govt’s prime goal: PM’s Energy Advisor Explaining the matter, he said Adani will purchase the coal for its power plant as primary fuel and Bangladesh will pay the price of the coal. Normally, the coal price is calculated on the basis of the Newcastle Price Index, and if any company purchases coal at a higher quantity with higher calorific value, then it gets upto 55 percent discount on the bulk value. This was the provision kept in the power purchase deal from the 1320 MW Payra power plant, a joint venture project of Bangladesh and China, where BPDB is benefiting from the discount in the price of coal. “But BPDB will not get any discount in coal price which ultimately pushes up the electricity tariff from the Adani plant by at least 50 percent,” said the official who has been involved in handling the project from BPDB. Read More: Electricity generation disrupted as Kaptai Lake’s water level decreasing As a result, if the price of electricity from Bangladesh's Payra Power Plant is calculated at Tk 12-13 per unit including the cost of coal, the price of per unit electricity from Adani plant will be about double at Tk 20-22 per unit, he added.

Bangladesh is likely to incur a huge financial loss to the tune of about Tk 700 crore per month, once it starts importing electricity from the Adani Power-built  1,600 MW thermal power plant in Godda, Jharkhand state - due to the ‘faulty’ deal the government signed with the private Indian company. “Including the cost of coal and its transport, we have to pay Tk 2,100 crore per month to import 1,600 MW from Adani's plant at a 75 percent plant factor considering the existing rates of coal in the international market," a top official of the state-owned Bangladesh Power Development Board (BPDB) told UNB. If some rules and provisions observed in other similar deals (from the private sector, coal-fired) had been maintained here, the cost could have been kept down to Tk 1400 crore per month. The country has to count a loss of about Tk 700 crore per month, working out to Tk 8400 crore annually for the faults in the deal, he added. Over the project’s life cycle of 25 years, the loss in terms of the increased cost and hidden components in the tariff Bangladesh will ultimately incur, balloons out to Tk 2.10 lakh crore - a third of the national budget - considering the current coal price, the senior official noted. Read: CPD raises question about power tariff enhancement proposal Even before coming to the hidden components, he said the tariff Adani managed to negotiate in the deal is almost double the purchase price from local coal-fired power plants, and thrice the rate of the power already being imported from India. Yet the loss will mainly be incurred due to the absence of any discount provision on the purchase of coal as fuel to operate the plant in the deal signed with the Indian business group, said the official, who spoke on condition of anonymity as the issue is highly sensitive. According to official sources, the import of electricity from the Adani plant may start from next March. Adani Power, a subsidiary of the Adani Group, the business empire led by the world’s second-wealthiest man, Gautam Adani, bagged the deal in 2015 during Indian PM Narendra Modi’s first visit to Dhaka. Adani is well-known for being close to Modi, right from the latter’s days as chief minister of Gujarat. Read: Mitsubishi Power to continue support Bangladesh power industry amid growing energy need Under the deal signed with Adani Power, a 1,600 MW coal-fired power plant was set up in the eastern state of Jharkhand, with a target to export its entire electricity to Bangladesh. As per Power Division documents seen by UNB, Bangladesh will have to pay Adani Power about $23.87 billion, equivalent to Tk 248,248 crore (considering US dollar exchange rate at Tk 104), over the 25-year life cycle of the plant. Officials said Bangladesh signed the final power purchase agreement (PPA) with Adani Power during Prime Minister Sheikh Hasina's New Delhi visit in 2017. Adani Group’s deal is not only faulty; the rate it is charging for its electricity is higher than rates of other coal-fired power plants. Read: Two repowering projects of 825 MW at Ghorashal Power Station fail to come on board on schedule Adani will be paid 8.612 cents per kilowatt hour (per unit), a levelised tariff for the electricity while the tariff for power purchase from a local coal-fired plant of the S Alam Group was set at 8.2557 cents per unit. The purchase rate of electricity from the Indian government (3.54 cents per unit) and private sector (7.84 cents per unit) are also lower compared to Adani's tariff. The government also had deals with other local and foreign companies at much lower rates such as Orion Khulna Power at 5.407 cents (Tk 4.35), and SEPC Taylor Power at 8.430 cents (Tk 6.78) per unit. Admitting the tariff charged by Adani is higher compared to that of other companies, Power Division officials said it is due to a number of reasons, including India’s high corporate tax and the cost of transmission lines that need to be constructed and maintained to move the electricity across borders. Read More: All liquid fuel-based power plants will be phased out over next 2 years: Nasrul Hamid The BPDB official said the lack of a provision for discounts in the purchase of the coal that will be used to fuel the plant is an oversight, considering such a provision was made mandatory in other deals that Bangladesh signed with independent power producers (IPP), where the price of coal to be purchased was kept as “pass-through”. Explaining the matter, he said Adani will purchase the coal for its power plant as primary fuel and Bangladesh will pay the price of the coal. Normally, the coal price is calculated on the basis of the Newcastle Price Index, and if any company purchases coal at a higher quantity with higher calorific value, then it gets upto 55 percent discount on the bulk value. This was the provision kept in the power purchase deal from the 1320 MW Payra power plant, a joint venture project of Bangladesh and China, where BPDB is benefiting from the discount in the price of coal. Read More: Saudi firm, BPDB sign deal to set up 1000MW solar power plant in Bangladesh “But BPDB will not get any discount in coal price which ultimately pushes up the electricity tariff from the Adani plant by at least 50 percent,” said the official who has been involved in handling the project from BPDB. As a result, if the price of electricity from Payra is calculated at Tk 12-13 per unit including the cost of coal, the price of per unit electricity from Adani plant will be about double at Tk 20-22 per unit, he added. Secondly, another fault in the deal is allowing Adani to import coal at its own choice (it even has its own coal mines) using its own ship and unloading it at its own port and then bringing the coal to its own power plant in Jharkhand via a massively elongated route. In this case, the transportation cost will go up excessively as the coal will be imported from Australia or Indonesia, both located to India’s east, and then unloaded at Adani-operated Mundra port in the Kutch district of Gujarat, a western Indian state, on Adani’s own shipping line. Read More: Govt positive about Singapore company's 400MW Matarbari solar power plant proposal: Nasrul After unloading, the coal will be transported some 2031.8 km by road from the far-western port of Mundra to the far eastern district of Godda in Jharkhand, a journey across the breast of India, to reach the power plant. The entire cost of coal purchase and transportation will be paid by Bangladesh as per the agreement, which raised eyebrows of many energy experts. If Adani purchases coal with low calorific value, then it has to import coal in higher quantities which will result in an even higher transportation cost, which would ultimately further push up the hidden component of the total tariff, said the BPDB official. Admitting the “no discount provision” in Adani’s deal, BPDB Chairman Mahbubur Rahman said since Adani will purchase the coal through open tender, there is no provision for discount. Read More: Safety features enhanced for Rooppur power plant as work goes on About the deal, when it was approved by the Cabinet Committee on Government Purchase, the then power secretary Dr Ahmad Kaikuas in a proposal had mentioned that the decision to import power from Adani Group was made on the basis of unsolicited offer under the 'Speedy Enhancement of Power and Energy Supply Act (Special) (Amendment) Act 2015'. "The proposal doesn't contradict the existing law, rules and regulation and no deviation was made in dealing with the matter," he said. The Power Division documents also reveal that in the tariff structure of Adani Group, the capacity charges were calculated at 3.8 US cents per unit while the variable operation and maintenance charges were at 0.1 cents per unit and the fuel price (cost of coal) was calculated at 4.7127 cents per unit. Power Division officials said Adani Group, which has experience of operating and maintaining 10,440 MW power plants in India and elsewhere, would be investing $2.124 billion to set up the 1600 MW dedicated plant in Jharkhand. Read More: Rooppur Nuclear Power Plant project delayed by Russia-Ukraine War: Yeafesh Osman Bangladesh will need to construct 145-kilometre transmission lines up to the Indian border at a cost of Tk 1,000 crore while Adani group will need to build a 90 km transmission line on the Indian side to supply the electricity.