7 June 2022 | Emran Hossain | The NewAge
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The capacity charge Bangladesh is set to pay the 1600MW Adani Godda power plant over its 25 years lifetime is more than enough to build three Padma bridges or nine Karnaphuli River tunnels or four metro railways in Dhaka, revealed a new report released on Monday.
The report jointly published by the Bangladesh Working Group on the External Debt and India-based Growthwatch estimated the capacity charge owed by Bangladesh to the Indian builder of the power plant in light of the agreement signed between the parties.
In the worst case scenario, the Power Development Board will have to pay $ 423.29 million or Tk 3,657.23 crore in capacity charges annually, and $ 11.01 billion or Tk 1,08,360.60 crore over the plant’s 25 years operational lifetime, the report said.
The Padma Bridge was built at a cost of $ 3.87 billion while the construction of metro railways in Dhaka costs $ 2.59 billion and the Karnaphuli River tunnel $ 1.22 billion, the report added.
In the best case scenario, the annual capacity charges payable to the Adani Godda power plant would stand at $ 331.66 million or Tk 2,865.55 crore while the lifetime capacity charges would reach $ 8.62 billion or Tk 84,903.72 crore.
The Adani Power Limited, a subsidiary of the India-based Adani Group, will have its investment returned in maximum six years, which may get reduced to 4.67 years in the worst case scenario, according to the report.
‘Since Bangladesh doesn’t need any more power, the amount spent will only benefit the Adani Group, not the people of Bangladesh,’ said Hasan Mehedi, one of the authors of the report.
‘So, the people, and the Bangladesh economy particularly, will have to suffer for the luxury of a billionaire company who is getting richer every year,’ added Mehedi, who is also the member secretary of BWGED.
The coal-fired Adani Godda plant being built in Jharkhand is likely to be commissioned in August but the transmission line Bangladesh needs to import power from the India-Bangladesh border will not be ready by December.
The PDB would have to pay $ 141.10 million or Tk 1219.10 crore in capacity charge in the four months till December.
Bangladesh paid over $ 1.55 billion or Tk 13,155 crore in capacity charge in 2020-21 for keeping about 60 per cent of its current generation capacity idle.
The PDB agreed to pay the Adani Godda power plant Tk 3.26 as capacity charge for per unit of unused electricity, above the capacity charge of Tk 2.83 paid to other similar power plants in Bangladesh.
The contract with the Adani Godda power plant also obliged the PDB to import electricity first despite the availability of cheaper electricity locally, the report said.
The PDB is also obliged to pay the price of fuel and Variable Operation and Maintenance cost for generated electricity for the power plant that is importing coal from more than 8,000km away and then transporting it by rail for another 700km to the plant site.
The PDB will also pay a wheeling charge of Tk 0.29 per unit for the transmission line built for evacuating electricity from the plant to the India-Bangladesh border with a yearly increase rate of 1 per cent, the report said.
The per unit electricity cost from the power plant may reach Tk 9.09 in 2022 and Tk 36.41 in 2047, which is 56.2 per cent higher than the imported power, 56.5 per cent higher than the domestic solar power and 196.1 per cent higher than the Indian solar power, the report said.
The report also estimated the environmental and social costs of the emissions of hazardous air pollutants and carbon dioxide from the power plant to be at $ 729.64 million or 5,569.34 crore Indian rupees per year and $ 24.72 billion or 188,708.29 crore Indian rupees over the power plant’s lifetime.
The power plant will likely emit 229.8 to 288.3 million tonnes of CO2 in its lifetime, the report said.
The Adani Power Limited acquired 1,255 acres, of which 81 per cent was agricultural land, from local farmers and indigenous Santal communities, displacing 5,339 households.
The estimated total cost of the Adani Godda power plant is $ 1.98 billion with $ 578 million equity and $ 1.4 billion loan.
About 14 per cent of the finance is coming from the Adani Group while other financiers included those from the USA.
SEPCO3, the subsidiary of the state-owned PowerChina, and the US-based global conglomerate, General Electric, is involved in the construction of the plant.