Snapshot

• The project is a major step towards ensuring Bangladesh’s energy security and may be a testament of broader energy partnership in South Asia.
• The Adani group on Saturday (15 July) announced that it has commenced the full-load power supply to Bangladesh from its 1,600 MW Ultra Super-Critical Thermal Power Plant (USCTPP) in Godda in Jharkhand.
• The Godda USCTPP, which marks the Adani Group’s entry into transnational power projects, is India’s first commissioned transnational power project where 100 per cent of the generated power is supplied to another nation.
• The news is a major reprieve for the besieged Adani Group which has been in the dock due to Hindenburg Research’s brutal investigation into the group.
• The importance of the project can be gauged from the fact that Adani Group chairman Gautam Adani, himself, met with Bangladesh Prime Minister Sheikh Hasina in Dhaka on 15 July at the handover of Godda power plant.

Background To Adani Power Deal

• The groundwork for Adani’s Godda plant was laid during Prime minister Narendra Modi’s first state visit to Bangladesh in June 2015.
• In Aug 2015, Bangladesh Power Development Board (BPDB) signed an MoU with Adani Power Limited (APL) to set up a coal-power plant in India to supply electricity to Bangladesh.
• APL incorporated a subsidiary, Adani Power Jharkhand Ltd (APJL), on 18 December 2015 for setting up 1,600 MW thermal power plant in Godda in Jharkhand.
• A long-term Power Purchase Agreement (PPA) was signed between BPDB and Adani Power Jharkhand Ltd in November 2017.
• APJL will supply 1,496 MW from the Godda USCTPP under the PPA with the Bangladesh Power Development Board via a dedicated transmission system connected to the Bangladesh grid.

Near To Border

• The Godda power plant, located about 100 km from the Bangladesh border, has two units of 800 MW each based on Ultra-supercritical technology.
• The plant has been commissioned in a record time of just three-and-a-half years after its financial closure.
• The total cost of Adani’s Godda coal-fired power project is approximately Rs 14,817 crore, which has been funded in a debt-to-equity ratio of 68:32.
• The first unit was commissioned on April 6 and the second on June 26.

Reduced Tariffs

• The electricity supplied from the Godda plant will replace expensive power generated from liquid fuel in Bangladesh, bringing down the average cost of power purchased.
• Bangladesh has a significant share of liquid fuel-based power generation plants, with a high cost of power.
• The energy cost of power generated by the Godda Power Plant in India is estimated to be far more cost-effective for Bangladesh.

Shot in the Arm

• The commencement of power supply from Adani group is a shot in the arm for Bangladesh, which is facing its worst electricity crisis since 2013.
• Power outages have severely affected the country’s industries, including the crucial ready-made garments (RMG) sector.

Fair Share of Controversies

• The power plant has faced criticism in Dhaka for the “lopsided nature” of the Power Purchase Agreement.
• The Adani group assures that there will be no cost rise in electricity supplied from Godda.

What Lies Ahead

• The Godda Power Plant is being hailed as a strategic asset in the India-Bangladesh relationship, which will ease the power supply in Bangladesh and make its industries and ecosystem more competitive.
• This collaboration between Adani Power and Bangladesh will boost the growth of industries and strengthen Bangladesh’s economy.

Tags: Gautam Adani, Transnational Power Project, Ultra Super-Critical Thermal Power Plant, Godda Power Plant, Bangladesh Prime Minister Sheikh Hasina, Bangladesh Power Development Board (BPDB), Adani Power Limited (APL)