No change in PPA for the project sought by Bangladesh: Adani Power

Last week, Bangladesh news agency, UNB reported that BNPB has sought revision of PPA

Bangladesh Power Development Board (BPDB), which is a key beneficiary of Adani's Godda power plant, has not sought revision of the power purchase agreement (PPA) for the project, Adani Power told Business Standard. 

“We confirm that there is no revision requested by the BPDP for the PPA for supplying power,” a spokesperson of Adani Power told this paper in an emailed response.

The company said that BPDP was looking for “temporary relief” in the cost of coal supplied to the plant.

“ BPDB has written to us to consider discounting the variable energy costs on a temporary basis given the current high thermal-seaborne coal prices, which is under consideration,” the spokesperson said. 

Last week, Bangladesh’s news agency UNB reported that  BPDB had sought revision of its PPA with Adani Power. This, it said, had been in response to Adani Power’s request to  BPDB for issuing a demand note for higher coal price.

The 1,600-Megawatt (Mw) Godda power plant is situated in Jharkhand and will source coal from the Carmichael coal mine in Australia that is owned and operated by Adani Mining.

Given the geopolitical tensions impacting global coal prices, the cost of coal from Carmichael has also escalated.

Sources in the public sector lending agencies said that any changes in the cost of coal, and subsequently power, could impact the commissioning date of the project.

The cost of Australian benchmark price for thermal coal had increased to $400 per tonne from $250 per tonne in the past one year. Indonesian thermal coal, which is a key supply to India, has also seen an increase of 90 per cent to $300 per tonne.

Godda is slated to start supply to Bangladesh from March this year. A joint steering committee will look at the changes to the PPA, if any, according to senior executives of Power Finance Corporation and Rural Electrification Corporation that spoke to Business Standard.

As of December 2022, Unit-1 (800 MW) of the Godda project has been synchronised with the Bangladesh power grid. It is available for generation at full capacity and will generate power based on advice from Bangladesh authorities, according to the company website.