Bangladesh Power Development Board (BPDB), the government agency responsible for the development of the Bangladesh’s power sector, has asked for a revision of the power purchase agreement (PPA) it signed with Adani Power Ltd. Fir importing electricity from its thermal power plant in Jharkhand, India.
The PPA between BPDB and Adani Power was signed in November 2017 in Dhaka, with them – Power division joint secretary faizul Amin , BPDB Secretary Mina Masuduzzaman and Adani’s business development President Kandarp Patel signing the PPA and implementing agreement on behalf of their respective sides.
What’s the reason?
The prime reason for the revision is reportedly due to a disagreement over the price of coal to be used as fuel for the project. The 1,600 MW plant in the Godda district of Jharkhand is expected to be fueled by the imported coal.
Significance
This news after the Hindenburg report makes it clear that Adani is not just stuck with a single front war but battels are spilling at various fronts. It is a major setback amid the ongoing crisis. However , Adani Power recently sent a request for BPDB to provide the demand note , with the coal price quoted at $400 per metric tone, which BPDB officals believe is much higher than it should be given the current state of the international market.
Adani needs the demand note
Adani Power needs a demand note from BPDB to present to Indian authorities before importing coal for its thermal power plant located in the Godda district of Jharkhand, Since almost all the power generated from the plant will be exported to Bangladesh. The cost for importing the coal, including transport, will be paid for by Bangladesh, with the price included in the power Purchase Agreement’s tariff.
What’s the demand of Bangladesh?
“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 as per report from United News of Bangladesh (UNB).
Sources that during the recent visit of a delegation headed by state minister for Power, Energy and Mineral Resources Nasrul Hamid to the thermal power plant located in Jharkhand ‘s Godda district, Bangladesh’s stance on the power purchase agreement with Adani Power was communicated to the Indian company’s officials.
However, the state minister publicly made no mention of any disputes during the visit, instead announcing that Bangladesh plans to commence importing 750 MW of power 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.
[…] Bangladesh is at a crossroads. After years of political turmoil and uncertainty, the country’s future as a democratic nation is uncertain. The current government has been accused of curbing democracy and suppressing dissent, leading many to believe that the country is headed towards dictatorship. […]