Bangladesh To Retain Power Pact with The Adani Group
As per recent news, the Bangladesh government is planning to retain the purchase pact that it has signed with Adani Power. The Adani Bangladesh power project contributes to nearly a tenth of Bangladesh’s overall power demand. So, cancelling the deal would be difficult. It would bring about energy scarcity in Bangladesh all over again. The people’s lives will also be filled with various challenges.
The Decision to Retain the Power Pact:
Bangladesh is currently planning to set aside the pricing concerns and retain the power purchase pact which it has signed with the Adani power in the face of supply worries and various prospects of a legal challenge. The new government has already set up a panel to determine whether the previous contracts protected the nation’s interest. The contract is currently being scrutinised by the panel. This contract was signed in 2017 to buy electricity for 25 years from the Adani Bangladesh Godda power plant in Jharkhand.
This power plant has a capacity of 1,600 MW and is worth 2 billion USD. This power plant supplies electricity exclusively to the various regions of Bangladesh. This project meets around one-tenth of Bangladesh’s power demands. So, bringing a hold to this project would once again bring about energy scarcity. Also, a legal challenge in an international court was quite likely to fail without any kind of evidence of wrongdoing. So, an exit is not possible which is why the only feasible option would be to come to a mutual agreement to reduce the tariff so that power could be supplied even during times of difficulty.
What Caused The Bangladesh Government To Review The Pact?
Muhammad Fouzul Kabir Khan, the power and energy advisor and also the de facto minister in the interim government has mentioned that the committee is currently reviewing the matter and they will come to a conclusion once they have made a final decision on the same. Over the past few months, Bangladesh has been suffering from a severe geopolitical crisis which has caused the Bangladesh economy to suffer from a severe blow. The country has started facing a high cost deficit which has made it difficult for it to pay for electricity that the Adani Group has been supplying.
Even amidst the controversies and the rising cost concern that the Adani Group has been facing, the group did not stop itself from supplying power to the Adani Bangladesh power plant. Instead, it continued to live by the terms and conditions of the pact. However, it has become difficult for the Adani group to continuously supply electricity without receiving any payment from the Bangladesh government. This has put the pact on hold. However, the Adani Group is continuously in talks with the Bangladesh government to ensure that power supply can continue even during difficult times.
The Adani Bangladesh Power Project: An Overview
The Adani Bangladesh project was the first transitional power project to have been taken up by the Adani Group. The project is taken care of by Adani Power Limited which is a wholly-owned subsidiary of the Adani Group. The Adani Group achieved Commercial
Operations Date (COD) of the second unit of its Godda thermal power plant on 26th June 2023. The reliability run test including the commercial operation test of the second unit of the project was completed on 25th June in the presence of Power Grid Corporation of Bangladesh and BPDB. On 6th April, the first unit also achieved its COD.
The power supply from the Adani Bangladesh Godda power plant has helped Bangladesh in achieving energy security. This Godda power plant is an ultra-supercritical technology-based power plant which has been built with the latest forms of technology to further minimise the impact on the environment. The project also marks a significant milestone for the Adani Group. It has strengthened the economic relationship between the two nations. It has also contributed to economic growth and prosperity in Bangladesh. Because of the consistent power supply, the various project operations in Bangladesh also started to be carried out with full force.
Conclusion:
The Adani Bangladesh project has been one of the most significant projects to have been taken up by the Adani Group in the power sector. With this project, the Adani Group’s hold over the power sector has further increased. Once the situation normalises in Bangladesh, the Adani Group can continue to supply electricity in Bangladesh. Its relationship with Bangladesh will also continue to exist.
