The dispute between Bangladesh’s Power Development Board (PDB) and India’s Adani Group over coal pricing for power generation remains unresolved. Bangladesh has verbally requested Adani to lower the coal price used in electricity cost calculations, but Adani has asked for a formal written proposal. Once submitted, both parties will discuss and finalise the price.
Bangladesh began purchasing electricity from Adani’s Godda power plant in Jharkhand in April 2023. However, even before supply began, controversy arose over Adani’s coal pricing.
Adani calculates the cost of supplying electricity to Bangladesh and prepares a bill accordingly. However, in doing so, the company has increased the price of coal, which PDB has refused to pay. Following negotiations, Adani agreed to lower the price, promising to charge Bangladesh less than the rate at which coal is purchased for the Payra and Rampal power plants. For a year, Adani adhered to this agreement.
Since July last year, however, Adani has been submitting bills with increased coal prices, making its coal 20 per cent more expensive than that used at the Payra and Rampal power plants.
PDB sources claim that Adani is requesting an additional USD 15 to USD 20 per ton of coal compared to the prices at the Payra and Rampal plants. The company is allegedly seeking this higher price by leveraging the formula outlined in the power purchase agreement with PDB. However, PDB is not factoring in the increased coal price when settling the bill.
According to sources, the agreement between Bangladesh and Adani Group stipulates that the coal price should be determined using the Australian (Newcastle Index) and Indonesian indices. The average of these two indices is meant to guide the coal pricing. Adani has been submitting bills based on this arrangement since July.
Australia and Indonesia are major global coal exporters, and their coal prices are regularly published in online indices. However, experts claim that the prices listed often include special discounts, which depend on the specific terms agreed upon during coal purchases.
For instance, the Payra power plant buys coal at a special discount, which results in lower electricity generation costs. Sources indicate that Adani, despite purchasing coal at a discount, is unwilling to offer similar concessions to Bangladesh when setting the electricity price.
A government-formed committee is currently reviewing the PDB’s agreement with Adani. A committee member, speaking anonymously to Prothom Alo, described the deal made under the previous Awami League government—prior to the July mass uprising—as “unequal.”
The member stated that Adani was granted several benefits in the agreement, and after examining the coal price formula, it appears that Adani’s intent was more focused on coal sales than on electricity generation.
An online meeting between the PDB and Adani delegations was held last week, during which PDB raised concerns about coal pricing. Meeting sources revealed that the issue of discounts on coal prices at the import stage was discussed.
In response, PDB requested Adani to maintain a fair coal price as before. However, Adani did not provide any immediate feedback, stating that discussions would take place only after receiving a formal written proposal.
PDB Chairman Md Rezaul Karim told Prothom Alo that Adani did not reject PDB’s proposal during the meeting. Instead, they requested a formal submission, after which discussions would follow.
He assured that the bill would be settled based on the final decision reached through these discussions. In the meantime, PDB has continued paying the bill using the previous coal price.
The price of electricity
According to the agreement, PDB purchases electricity from all power plants operating to supply power in Bangladesh. In the 2023-24 fiscal year, PDB spent approximately Tk 11.83 per unit of electricity from the Payra power plant, while the cost per unit from Adani was around Tk 14.87—even after applying a discount on coal prices. If Adani’s bills are paid based on the increased coal price in the current fiscal year, the per-unit cost will rise even further.
Adani’s coal-fired power plant has a total capacity of 1,600 megawatts, consisting of two 800-megawatt units. Under the 2017 power purchase agreement, Bangladesh will buy electricity from this plant for 25 years.
Adani currently supplies up to 1,500 megawatts of electricity daily. However, one unit was shut down for three months during winter due to low demand, reducing supply to 750 megawatts. In preparation for the summer season, PDB has requested an increase in power supply, and Adani has agreed.
Last Tuesday, Adani restarted the previously closed unit, but it was shut down again due to a technical fault. Repair work is ongoing, and production from the plant is expected to increase soon.
A senior PDB official, speaking anonymously to Prothom Alo, confirmed that discussions on coal pricing are ongoing. However, he emphasised that Adani has been asked to ramp up electricity supply to meet summer demand.
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