Bangladesh to review power purchase agreement with Adani Power

07 Feb 2023 CW Team

The Bangladesh Power Development Board (BPDB), the government agency in charge of developing Bangladesh's power sector, has requested that the power purchase agreement (PPA) it signed with Adani Power for importing electricity from its thermal power plant in Jharkhand, India, be revised. According to reports, the primary reason for the change is a disagreement over the price of coal to be used as fuel for the project.

This news, following the Hindenburg Report, demonstrates that Adani is not only fighting on a single front, but conflicts are raging on multiple fronts. It is a significant setback in the midst of the current turmoil.

According to sources, BPDB has already written to the Adani Group, asking the opening of Letters of Credit (LCs) in India in order to purchase coal. The imported coal is expected to power the 1,600 MW facility in Jharkhand.

Adani Power need a demand note from BPDB before importing coal for its thermal power plant in the Godda district of Jharkhand, as practically all of the power generated by the project will be sent to Bangladesh.

Bangladesh will pay for the cost of importing the coal, including transportation, with the sum reflected in the Power Purchase Agreement's rate. However, Adani Power recently requested that BPDB produce the demand note, with the coal price listed at $400 per metric tonne, which BPDB officials say is far too excessive given the current status of the worldwide market.

According to officials, the ensuing letter constitutes BPDB's formal request for the PPA to be reviewed and the tariff structure to be changed before it can begin importing electricity.

BPDB has raised concerns over a steep bill for the purchase of coal from Adani Power, as the Power Purchase Agreement (PPA) signed with the Indian firm does not contain a provision for discounts.

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