Environment Network calls for cancellation of Adani Power deal

Bangladesh Environment Network (BEN) today calls for the cancellation of the power purchase agreement with India's Adani Group and demanded identifying the "vested groups" who pushed for this deal at the cost of national interests.

The government signed the deal under conditions that hugely favour Adani Power at the cost of Bangladesh, said the Bangladeshi-origin environmentalists in a statement.

"It is not clear why Bangladesh needs to import power when almost half of the country's power generation capacity remains idle," said the statement signed by Md. Khalequzzaman, global coordinator of BEN, and Ahmed Badruzzaman, chair of BEN energy expert panel.

Bangladesh is set to start buying half the power generated by the 1,600-megawatt thermal power plant located in a village about 100 kilometres from the border in India's eastern state of Jharkhand.

"The conditions under which this power is imported are highly unfavourable for Bangladesh. No power company in Bangladesh enjoys the financial benefits that have been awarded to Adani Power under this."

Quoting press reports, BEN pointed out eight "unwarranted benefits".

It is estimated that Bangladesh may have to spend more than Tk 6,500 crores for a clause in the PPA related to coal consumption.

"Second, Bangladesh Power Development Board (BPDB) must send a power demand note to Adani company every four months and if, due to changed circumstances, BPDB buys less power, Bangladesh will have to pay for the full amount mentioned in the demand note."

Third, Bangladesh will have to buy at least one-third of the power generated by the plant or face a penalty.

Fourth, Bangladesh will have to pay the full capacity charge if there is any delay in the start of commercial operation due to BPDB's lack of demand.

Fifth, Bangladesh must bear the responsibility of system loss in the use of coal in the Adani Power plant.

Sixth, Adani Power will be able to manipulate the price of coal imported from abroad for use at the plant because its sister concerns control everything from mining to transportation of the coal from abroad.

Seventh, after Bangladesh signed the PPA with Adani in November 2017, the Indian government in 2019 declared the 425 hectares of land on which the state-of-the-art power plant was built as a special economic zone.

As a result, Adani will get a range of tax benefits.

"However, Adani Power has not informed BPDB about these tax benefits and does not seem to be willing to share them with Bangladesh."

Eighth, the deal with Adani Power places all the risks of this project on Bangladesh and imposes many obligations on the government.

The deal reflects a larger problem that Bangladesh has brought on itself by adopting the Power System Master Plan (PSMP) prepared by the Tokyo Electric Company.

PSMP increases not only Bangladesh's dependence on coal but also its dependence on imported power.

"Bangladesh's current electricity import rate is higher than all other countries in South Asia except Afghanistan," it added.