, APAC

Adani’s Godda plant may drive up power tariffs in Bangladesh 

This will lead to a “very expensive” power, the IEEFA said.

Adani’s Godda coal-fired power plant, which will start generating power in December, is expected to add pressure to tariff hikes in Bangladesh, an analyst said. 

In a report, the Institute for Energy and Economic Financial Analysis (IEEFA) said the power plant, fuelled by coal shipped from the Carmichael mine of Adani in Australia, is expected to supply “very expensive” power to Bangladesh. 

“Coal is being imported from Carmichael and railed 700km from port to the Godda power plant in Jharkhand state, India. The full cost of this is being passed onto Bangladesh. Power from Godda will then be exported to Bangladesh, reportedly costing almost double the initial expectation at around US$150/megawatt hour (MWh),” report author Simon Nicholas said.

“During the Carmichael coal mine’s protracted development phase, backers of the Queensland project often stated that the project was needed to help people out of poverty in South Asia. This was merely coal industry spin. If anything, it is doing the exact opposite.”

Read more: Adani unit commissions 450MW wind-solar hybrid plant

Bangladesh’s growing dependence on fossil fuel imports has become a crisis amidst record high prices. 

This has also led credit rating agency Moody’s to place the country Bangladesh under review for a downgrade in early December 2022 due to its rapidly declining foreign exchange reserves driven by rising costs for energy imports.

“This price is two and a half times the price at which the state-owned utility BPDB sells power to distributors,” says Nicholas.

“The huge gap in price at which the BPDB buys and sells power has to be covered by government subsidies that are becoming increasingly unaffordable and which will lead to the need to increase power tariffs significantly to transfer the burden onto consumers.”

 

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