Adani agrees to adjust power cost in line with Payra, Rampal coal cost

Adani Group has agreed to adjust the price of coal imported for its Godda 1600MW Thermal Plant - which almost solely supplies electricity to Bangladesh - in line with the cost of Payra and Rampal Coal Power Plants' cost.

"The managing director and CEO of Adani power held a discussion with the government and BPDB officials. The four-member visiting team has assured that our cost will be in line with other local coal power plants," said an official at Adani Bangladesh office.

As per the Power Purchases Agreement (PPA) with Adani Group the price of coal will be "pass-through," which means Bangladesh will have to pay the market price for coal imports, without any price ceiling or discount provision.

Since practically all the power generated by the plant located in the Godda district of Jharkhand state will be exported to Bangladesh, Adani Power requires a demand note from BPDB that it can present to Indian authorities before opening LCs against the coal import.

Adani Power recently sent a request to BPDB to issue the demand note, where the coal price was quoted at $400 per metric tonne.

BPDB officials found the Adani quoted price around 60% higher than the cost of coal with the same heating value that has been used in the Payra1320 MW Thermal Power Plant built in Patuakhali of Barishal.

BPDB officials claimed that the price of coal of the Adani 1600MW power plant should not be above $250 per tonne.

The cost of electricity of the Adani power plant, which is scheduled to start commercial operation from the first week of March, has been widely criticised by both national and international media.

Therefore, the state-owned single buyer of electricity, sent a letter to the Adani Group demanding for a mechanism to make the coal price more competitive.

A four-member delegation of Adani flew here to discuss a mechanism to make the coal price more competitive which has been demanded by BPDB and Power Division.

Before Thursday's meeting both the parties also had several virtual meetings on the matter, said sources at BPDB.

Meanwhile, the Power Division formed a nine-member committee headed by the Power Division Secretary Md Habibur Rahman.

As per the assignment, the committee is now working to find out the mechanism to keep the coal price competitive and cost effective.