An Interview of S B Khyalia, the CEO of Adani Power Limited. Taken by Abu Taher, Staff Reporter of Bonik Barta
Adani Power has been supplying electricity (COD) on a commercial basis from the Jharkhand power plant since April 6. Adani Power has already notified the Indian Stock Exchange about the commercial power export. Has Bangladesh Power Development Board (BPDB) completed all the formalities on its part for commercially buying electricity from Adani Power?
Yes, there was a team from the Bangladesh Government comprising experts from BPDB and the Power Grid Company of Bangladesh (PGCB), who visited Godda, Jharkhand for a week during the commissioning first unit. They witnessed tests like reliability run and maximum load test as mandated in PPA. All the tests were completed successfully and their data was shared with BPDB, completing all the technical formalities.
Adani Power has already submitted its first bill to BPDB for supplying electricity in April. Did you get the bill payment? How much was the power generation cost and how was it calculated then? Is Adani Jharkhand power costlier than the power generated by Payra or Rampal thermal plant?
We have submitted the first monthly bill but cannot disclose the amount due to the confidentiality clause of the contract. However, we can say, as we have been saying all along, that our per unit cost is in the same ballpark range as other large coal-based thermal power plants operating in Bangladesh, like Payra and Rampal.
One of the two units of the 1,600 MW Godda power plant is in production. So far, there has been no technical disruption in the power supply from the first unit. The second unit is scheduled to go into production in mid-June. When will the second unit be commissioned? Will Adani Power be able to provide an uninterrupted power supply to Bangladesh from Godda?
We are ahead of schedule in terms of readiness for the second unit. In fact, as of the second week of May, we have synchronized our second unit with the Bangladesh grid and are already supplying power. If you see our daily power supply to Bangladesh in a report published by PGCB, which is a public information, you will find that sometimes we supply a few hundred more MW power than 748 MW. On these occasions, our second unit also supplies power in addition to the first unit. We are planning to invite BPDB and PGCB officials to visit Godda in late May 2023, so that we can start the commissioning and testing activities of Unit 2.
We are totally committed to supplying uninterrupted power to Bangladesh and we believe our power supply will play a positive role in improving reliable and cost-effective power supply to ‘Uttarbango’ NorthWestern districts of Rajshahi and Rangpur division of Bangladesh.
Some provisions in the power purchase agreement between BPDB and Adani Power have been criticized by different quarters in Bangladesh, for example, the coal price for the power plant was fixed at $400 per tonne. It is almost double that of the other coal-based power plants in Bangladesh. What exactly is the coal pricing mechanism?
We would like to appraise you that the news published in a section of the media regarding the coal price of $400 is totally erroneous. There is no truth in it. This was part of a false propaganda and misleading information campaign, intentionally spread by some vested quarter who are against the collaboration between the people of India and Bangladesh. Our coal price is based on universally accepted international coal price indexes of Australia and Indonesia. International coal prices are going down every month. You can check the coal price indexes. We can tell you that according to our contract, the total fuel charge (which includes coal price, shipment and transportation cost of coal, all taxes, etc.) that we bill to BPDB is in the order of 10-11 US cents for each Kwh of power generation. Again, this cost is going down every month.
Coal prices are volatile in the international market. If the price of coal falls below 100 dollars in the future, how will the power price be determined?
As we have already mentioned, if the global coal price drops, the fuel payment by BPDB will automatically be reduced. Bangladesh will get a reliable power supply at an even cheaper cost. When we took up the challenge of setting up a completely dedicated power plant in Godda, Jharkhand to supply power to Bangladesh, our intention was to support power-deficit underserved region of Bangladesh at a very affordable cost by utilizing our strength across the value chain of power generation in our Group. (i.e., mines, ports and logistics, and thermal power generation expertise). Only a huge and diverse business conglomerate like the Adani Group can support Bangladesh in this manner.
BPDB's power purchase agreement with Adani Power is in US dollars. There is currently a dollar crisis in Bangladesh. BPDB is unable to pay the 10-month arrears of Payra power plant due to the dollar crunch. For the same reason, coal imports have stopped at Rampal thermal power station. In case there is a delay in receiving the bill or the amount of arrears increases, will there be any crisis in the operation of the power plant? Will it make any impact on your power export?
There are two parts to the question. In our case, there is no separate requirement for coal import LC issues like in Rampal and Payra’s case. BPDB just needs to pay for the consumed electricity. So, it’s less paperwork and less hassle. That is the good news.
However, you have to understand that for large infrastructure projects like Godda Power Plant, which is debt-financed, we have lenders who have invested in the project and they have to have their return on their investments. We are sure BPDB understands it and they will pay the due electricity bill according to the provisions of the contract.
Does Adani Group have any new investment plans in Bangladesh in the near future? It has invested a lot in India, especially, in the renewable energy sector. Is there any plan to invest in the renewable energy sector in Bangladesh?
Adani Group is always looking for the right investment opportunities across all our businesses. Bangladesh is very much there as part of our expansion plan. We have great expertise in the renewable energy sector. In fact, Adani Green Energy is the largest renewable energy company in the world. If Bangladesh Government wants us to invest in this sector, we are always ready to extend our helping hand. But before we make any investment decision, we always keep in mind whether we can bring a positive change in the lives of the people through our investment.
Many citizens in Bangladesh are asking for the cancelation of the contract with Adani Power. Some have suggested that the agreement should be revised. Is there any such possibility?
We are sure all these people you have mentioned are not aware of the facts and figures and are confused by the misleading campaign by the vested quarter. All these wild figures were manufactured long before we supplied any electricity and placed any bill for electricity. Now that we have supplied power, everybody will be aware of the real cost structure. So, nobody would make such a demand. If Adani is providing cheap and affordable electricity to an underserved region in an uninterrupted manner during the height of demand and contributing to the development and betterment of the country and the lives of crores of people, it does not make sense for anyone to oppose our contract.
Stock prices of various businesses of the Adani Group in India have fallen at an unusual rate. Do you think Adani will come back and its future is bright? Will it have any impact on the Jharkhand power plant?
True, Adani Group stocks were impacted in January due to a malicious ill-intentioned campaign by some vested quarter. But as you know, truth prevails in the long run and is coming out. This is being reflected in our stock process. With the confidence of the investor community, all our stock prices have recovered greatly.
Our position has always been that all the allegations were totally false. Recently, Mauritius Government refuted some false claims. The Supreme Court-nominated committee primarily stated in its report that the panel did not find any regulatory failure in price manipulation as alleged in the Hindenburg report.
The Jharkhand Power project is up and running. We have a contract in place for power supply and payment. So, this project is financially self-sustaining.
Thanks and gratitude for your valuable time from the Daily Bonik Barta.