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BAPA and BEN Demand the Cancellation of the Power Import Deal with India’s Adani Group

According to the news published in various newspapers, Bangladesh will start buying electricity commercially from the first week of March this year from the 1,600 MW coal-based power plant of the Adani Group built at Godda in Jharkhand, India. This power is being purchased in unfavorable conditions for Bangladesh. The financial benefits that are being awarded to Adani Power in this deal have not been given to any other company in Bangladesh. We present below some aspects of this agreement deemed to be against the interest of Bangladesh, as reported in the reputed national media of Bangladesh, citing reliable sources.

First, while coal consumption per unit for various coal-based power plants in Bangladesh is assumed to be the same regardless of their capacity utilization, in accordance with the well-known fact that the efficiency of the coal-fired plants does not get affected by the load variation, the coal consumption per unit for the Adani Power plant will dial up when their capacity utilization is low. Bangladesh will have to spend over 6,500 crore rupees annually because of this alone. Second, the Power Development Board (PDB) must send a power demand letter to Adani company every four months and if PDB buys less power than the demand letter due to changing circumstances, Bangladesh must pay the full amount mentioned in the demand letter. Third, Bangladesh will have to buy one-third of the power generated by the Adani Power plant; otherwise, pay a fine. Fourth, Bangladesh will have to pay the full capacity charge if the Adani Power plant goes into commercial production due to PDB’s lack of demand. Fifthly, Bangladesh must bear the responsibility of system loss due to the use of coal in the Adani Power plant. Sixth, the price of coal imported from abroad for Adani Power plants will depend on Adani itself, as the company controls everything from extraction to transportation in coal mines abroad. Seventhly, Bangladesh signed a power purchase agreement with Adani in November 2017. But with the declaration of Jharkhand as a “Special Economic Zone” by the Government of India in 2019, the Adani company is getting a range of tax benefits. But Adani Company has not informed PDB about this and is not trying to make Bangladesh a part of these tax benefits. Eighth, all the risks of this project are placed on Bangladesh and many obligations were imposed on the country as well.

Because of the above features of the power purchase agreement with the Adani Power, the Consumers’ Association of Bangladesh recently opined that the ‘fraudulence of this agreement surpasses everything.’ BAPA and BEN support the demands to end the power purchase contract with the Adani Power.

In this context, BAPA and BEN also note that the Bangladesh government has adopted a power sector plan drafted first by the Tokyo Electric Company, and then by the Institute of Energy Economics, Japan, which is not only coal-dependent but also import-dependent! According to this plan, the share of imported electricity in Bangladesh’s total electricity supply will increase from 5 percent in 2021 to 15 percent in 2050. Note that Bangladesh’s current electricity import, as a share of total use, is higher than all other countries in South Asia except Afghanistan. The conference on “Energy, Climate Change, and Sustainable Development” organized by BAPA and BEN in Dhaka in January 2022 criticized the plan and called for a new power sector plan with the objectives of reducing dependence on coal, increasing the role of renewable energy, and avoiding imported electricity. The current situation with the Adani Power justifies the call for the formulation and follow-up of a new powers sector plan made in the BAPA-BEN conference. Through this statement, BAPA and BEN calls the Government of Bangladesh to pay attention to those demands as well.

 

Sultana Kamal,

President, Bangladesh Poribesh Andolon (BAPA)

And,

Dr. Md. Khalequzzaman,

Global Coordinator

Bangladesh Environment Network (BEN)

 

 

 

BEN Desk

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