The dispute between the Bangladesh Power Development Board (PDB) and India’s Adani Power over coal pricing remains unresolved, as both parties have yet to reach a final agreement.
While Bangladesh has urged Adani to lower the coal price in line with market rates, Adani has requested a formal proposal before further discussions can proceed.
Bangladesh began purchasing electricity from Adani’s 1,600-megawatt coal-fired power plant in Godda, Jharkhand, in April 2023.
However, even before the supply commenced, controversy arose regarding the coal pricing mechanism set by Adani.
The company initially agreed to match the coal price with that of Bangladesh’s Payra and Rampal power plants, which procure coal from the global market at competitive rates.
For approximately a year, Adani adhered to this commitment, but since July last year, the company has submitted invoices reflecting an increased coal price, making its rates nearly 20% higher than those of Payra and Rampal.
Sources indicate that Adani is now demanding an additional $15–$20 per tonne compared to the rates at which coal is purchased for the Payra and Rampal power plants.
Despite benefiting from special discounts while sourcing coal, Adani has not extended similar concessions to Bangladesh in its electricity pricing.
However, PDB has refrained from acknowledging the increased coal price when making payments.
The power purchase agreement between PDB and Adani stipulates that coal pricing should be based on indices from Australia (Newcastle Index) and Indonesia.
Since July, Adani has been invoicing according to these indices.
Industry insiders note that while these benchmark prices are publicly available, coal procurement often involves negotiated discounts, which Adani may be benefiting from but not passing on to Bangladesh.
Amid mounting concerns over the contract's terms, a government committee is currently reviewing the agreement.
A committee member, speaking anonymously, described the contract—originally signed under the now-ousted Awami League government—as “imbalanced,” stating that the deal appears to prioritise Adani’s coal sales over electricity generation.
Last week, representatives from PDB and Adani held an online meeting where PDB raised concerns over the inflated coal prices.
Sources indicate that PDB requested Adani to apply a more reasonable price, factoring in the customary import-level discounts.
Adani, however, has not provided a definitive response, stating that it would issue a formal proposal before continuing negotiations.
PDB Chairman Rezaul Karim confirmed that the discussions are ongoing and that Adani has not outright rejected Bangladesh’s proposal. He added that payments would be adjusted according to the final agreement reached through these negotiations.
Until then, PDB continues to settle bills based on the previously agreed coal prices.
Rising costs in power supply
Under the current financial framework, PDB purchases electricity from all power plants operating within Bangladesh.
In the 2023–24 fiscal year, PDB incurred a cost of Tk11.83 per unit for electricity from Payra, whereas electricity from Adani was priced at Tk14.87 per unit—despite the initial coal price concessions.
If PDB were to pay Adani’s latest invoiced coal price, the per-unit cost would rise even further.
Adani’s power plant, comprising two 800-megawatt units, supplies up to 1,500 megawatts of electricity daily.
However, due to reduced demand during winter, one unit has remained idle for the past three months, reducing the current supply to 750 megawatts.
As summer approaches, PDB has requested Adani to ramp up electricity production.
In response, Adani attempted to restart the idle unit last Tuesday, but a technical malfunction forced its shutdown.
Repairs are currently underway, and supply is expected to increase soon.
A senior PDB official, speaking on condition of anonymity, noted that while discussions over coal pricing continue, ensuring adequate electricity supply for the summer months remains a priority.
