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Business News/ News / India/  Launch of Adani plant ops for power supply to Bangladesh may be deferred
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Launch of Adani plant ops for power supply to Bangladesh may be deferred

The plant that was expected to supply 750 MW of power to Bangladesh, starting March, may be deferred by six months

The development comes at a time the Bangladesh Power Development Board has sought a revision to the agreement with Adani Power due to the high prices of the coal sought by the company.Premium
The development comes at a time the Bangladesh Power Development Board has sought a revision to the agreement with Adani Power due to the high prices of the coal sought by the company.

New Delhi: Lenders may extend the commercial operations date (COD) for Adani Power’s Godda thermal plant in Jharkhand, which was set up to supply power to Bangladesh, by six months, as the laying of the transmission lines is yet to be completed, said two people in the know.

Power Finance Corp. (PFC) and Rural Electrification Corp. (REC) have already disbursed loans of around 10,000 crore for the plant that was expected to supply 750 MW of power to Bangladesh, starting March.

However, if the COD is postponed, the operationalization of the unit will also be delayed. In power sector, COD refers to the date when a facility starts generating power to earn revenues under long-term power purchase agreements (PPAs) .

One of the two officials said transmission lines in Bangladesh have not been completed yet and that is the major reason for extending COD.

“Repayment of the debt starts only after commencing of the commercial operations date," said another official.

As per the agreement, Adani Power will install a dedicated 106-km transmission line from Godda to the interconnection point at the border and a 28-km transmission line is being built by Power Grid Corp. of Bangladesh connecting the Rohanpur substation to Indo-Bangla border. Email queries to PFC, REC, Adani Power, the union ministry of power and Power Grid Co. of Bangladesh did not elicit a response till press time. An Adani Power official said anonymously the project is in schedule.

The development comes at a time the Bangladesh Power Development Board has sought a revision to the agreement with Adani Power due to the high prices of the coal sought by the company. It signed a 25-year PPA with Adani in November 2017 for supplying 1,496 MW of electricity from the power plant. Import and transportation costs of fuel will be borne by Bangladesh and the price is a factor in power tariffs under the PPA. Adani Power had requested a demand note from BPDB quoting a price of $400 per metric tonne for coal, but Bangladesh feels it is far higher than internal market prices.

The power plant is one of the projects being developed by India to boost economic ties with its neighbour, which will also consolidate India’s strategic position in South Asia.

During the India visit of Bangladesh Prime Minister Sheikh Hasina in September last year, Adani Group Chairman Gautam Adani met her and said in a tweet that both sides are committed to commissioning the 1600 MW Godda Power Project and the dedicated transmission line to Bangladesh would be completed by 16 December, 2022.

Last month, Nasrul Hamid, the Bangladeshi state minister for power, energy and mineral resources during his visit to the plant had said: “By mid-March, we will hopefully get around 750MW from the power plant."

The eastern neighbour is increasing its domestic power generation and import of power in a bid to ensure energy security as it has faced some severe power outages over the years.

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ABOUT THE AUTHOR
Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Published: 03 Feb 2023, 10:38 PM IST
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