Adani power plant in Jharkhand | Setback to a project not reflection of policy for neighbourhood: India

In the wake of the Adani market crash, the Bangladesh government is seeking a lower coal price in its agreement to import power from Adani’s thermal power plant in Jharkhand, a news report says

February 02, 2023 10:36 pm | Updated February 03, 2023 12:30 am IST - NEW DELHI

Arindam Bagchi, spokesperson of Ministry of External Affairs | File Photo

Arindam Bagchi, spokesperson of Ministry of External Affairs | File Photo | Photo Credit: PTI

A setback to a power or connectivity project with India’s neighbours will not deter India from carrying out its “neighbourhood first” strategy, the official spokesperson of the Ministry of External Affairs said on Thursday. His remarks came in the wake of reports that the government of Bangladesh has asked India’s troubled Adani group to revise its power purchase agreement to import power from the Adani thermal power plant in Godda, Jharkhand.

“We do think that greater economic integration, connectivity with our neighbours assists our process of development. We have been talking about our neighbours benefiting from the economic growth of India. We have tried to make it easier for connectivity -- be it physical, energy or power transmission. This is part of our larger strategy of ‘Neighbourhood First’. Under that we would like to see greater economic integration, projects, investments. But if a certain project is not working because of financial reasons, then I don’t think that is a reflection of our relationship,” the MEA’s official spokesperson Arindam Bagchi told journalists, emphasising that India would continue to make efforts to strengthen energy and connectivity ties in the South Asian region.

He was responding to media queries on the Adani group’s declining fortunes’ impact on India’s economic diplomacy. Shares of companies in the group have been battered in the stock market after a U.S.-based short seller circulated a report accusing the conglomerate of manipulating stock prices.

‘Seeking lower prices’

With this backdrop, the Bangladesh Power Development Board (BPDB) sent a letter to the Indian group seeking a “revision to the power purchase agreement”.

“We have sent a letter to the Adani Group following a request we received in relation to opening LCs (in India) to import the coal that will be used as fuel for the 1,600 MW plant in Jharkhand,” a highly-placed source of BPDB told UNB, a leading newswire service in Bangaldesh. BPDB officials believe that the $400 per metric tonne (MT) price of coal quoted by Adani Power was much higher than the international price.

“In our view, the coal price they have quoted ($400/MT) is excessive. It should be less than $250/MT, which is what we are paying for the imported coal at our other thermal power plants,” an official was quoted as saying by the UNB.

Bangladesh is an important partner for India in South Asia and Prime Minister Sheikh Hasina is expected to participate in the G-20 summit in September where Bangladesh will be a “guest country”. Gautam Adani, the chairperson of the Adani Group, had met Sheikh Hasina during the latter’s September 2022 visit to Delhi.

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