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.
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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.
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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.