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On Saturday, July 15, Adani Enterprises announced that it had started supplying Bangladesh with power at full capacity from its 1,600 MW Ultra Super-Critical Thermal Power Plant (USCTPP) in Godda, Jharkhand.
The Godda USCTPP is India’s first transnational power project that has been commissioned where 100% of the generated power is sent to another country. It also marks the Adani Group’s entry into the transnational power project market.
The Adani Godda project’s significance can be determined by the fact that Gautam Adani, the chairman of the Adani Group, personally met with Sheikh Hasina of Bangladesh on July 15 in Dhaka at the handover of the Godda power plant.
On a social media post Mr. Gautam Adani wrote “Honoured to have met Bangladesh PM Sheikh Hasina on full load commencement and handover of the 1,600 MW Ultra Super-Critical Godda Power Plant. I salute the dedicated teams from India and Bangladesh who braved COVID to commission the plant in a record time of three-and-a-half years,”
History of the Adani Power Agreement
The government-owned Bangladesh Power Development Board (BPDB), which is responsible for purchasing electricity, subsequently signed an agreement with Adani Power Limited (APL) in August 2015 to build a coal-fired power plant in India at a suitable location for Bangladesh.
Adani Power Jharkhand Ltd. (APJL), a subsidiary of APL, was established on December 18 in order to build a 1,600 MW thermal power plant in Godda, Jharkhand. In November 2017, BPDB and Adani Power Jharkhand Ltd. signed a long-term Power Purchase Agreement (PPA) as a result.
Under the 25-year PPA with the Bangladesh Power Development Board, APJL will provide 1,496 MW from the Godda USCTPP via a 400 kV dedicated transmission infrastructure connected to the Bangladesh grid.
Close to Border
The Godda power station, with two 800 MW units each, is situated around 100 kilometres from the Bangladeshi border. It uses ultra-supercritical technology. The most environmentally friendly approach to produce power is using Ultra Super-Critical Power Plants.
The facility was put into operation in a record-breaking three and a half years following its financial closure.
The accomplishment is especially noteworthy in light of the significant logistical difficulties the project involved, including the construction of a 105 km long 400 kV Double Circuit Transmission Line, a private railway line, and a substantial water pipeline from the Ganges.
According to a 2020 assessment by Brickwork Ratings, the Godda coal-fired power plant by Adani has a total cost of roughly Rs 14,817 crore and has been financed with a debt-to-equity ratio of 68:32. Rural Electrification Corporation (REC) and Power Finance Corporation (PFC), two public sector finance institutions, have each contributed an equal amount towards the debt of Rs 10,075.42 crore.
Timeline
Final commissioning dates for the first unit were April 6 and June 26.
However, the Adani Godda plant was waiting for approval from the BPDB to commence electricity transmission to the adjoining country while the units were completely operational and began to supply power.
The Godda plant’s dependable capacity test was finished by the APJL on July 12; as a result, the facility started operating at full capacity.
The PPA’s mandated reliable capacity test, which was done throughout the allotted six hours, evaluated the plant’s two units’ ability to operate simultaneously after they started supplying energy.
Lower Tariffs
In a statement, the Adani Group claimed that because it will replace expensive power produced from liquid fuel, which raises the average cost of power purchased, the electricity delivered from its Godda facility will greatly improve the situation in Bangladesh.
With a 34% share of the total installed capacity, Bangladesh boasts one of the largest liquid fuel-based power production facilities on the Indian subcontinent. Around 6,329 MW of installed capacity comes from heavy fuel oil (HFO)-based plants, while 1,290 MW comes from high-speed diesel (HSD)-based plants, for a total installed capacity of over 7,600 MW.
The total tariff of HFO-based plants is around BDT 22.10/kWh (USC 21/KWh), whereas the total tariff of HSD-based power plants is roughly BDT 154.11/kWh (USC 149/KWh), according to the BPDB’s annual report for the FY 2021–22.
Godda Power Plant in India, in contrast, is anticipated to have an energy cost of roughly 9 cents/kWh, making it a much more affordable source of electricity for Bangladesh.
Breath of Fresh Air
The start of power delivery from the Adani Group is a breath of fresh air for the 170 million-person South Asian nation, which has been suffering from its worst electricity crisis since 2013.
Since the government cannot import fuel due to a decline in foreign exchange reserves and the falling value of the Bangladeshi taka, which depreciated by nearly 25% against the US dollar last year, the nation has been forced to go without electricity for 114 days in the first five months of 2023.
To put this into perspective, data from the state-owned Power Grid Company of Bangladesh showed that at least 53 of the nation’s 153 power plants were shut down in June for upkeep or a lack of fuel as a result of the dollar shortage.
The country’s essential ready-made garments (RMG) sector, which generates more than 80% of its export revenue but has been severely impacted by power outages, is also anticipated to benefit from the power supply from Godda.
