Adanis power supply to Bangladesh
Export deal yet to gather pace
UNB
Indian conglomerate Adani Groups final Negotiation with Bangladesh for power export deal is yet to gather pace as both sides are waiting for a new law to be formulated by India, Power Division, officials said, reports UNB.
According to the sources, the new law will be enacted by India to facilitate its companies direct power export to any country. Once the new law is in place, both sides will the start negotiations, officials said. They said Bangladesh government, after a long discussion with Adani, reached an understanding with the Indian conglomerate that it would set up a 3000 MW plant in Indian state of Orissa to export electricity to Bangladesh.
Adani had proposed to invest $2.2 billion to set up a 1,600 MW in Bangladesh to sell electricity to local grid. But, land scarcity prompted both sides to go for the new arrangement. As per the latest understanding, the huge 3000 MW power plant will be exclusively built in Orissa for power export to Bangladesh, not to sell in the Indian market.
Officials said when both sides were proceeding for the final negotiation on the deal, they found the existing law in India unfavourable as it disallows such direct export deal where power tariff are supposed to be fixed through bilateral negotiations.
Indian electricity market is currently highly regulated by Indian Central Electricity Regulatory Commission (CERC).
Under the existing process, if any Indian firm wants to sell or buy electricity in bulk, it has to participate in the auction process and power tariff is to be set by CERC.
Power Division officials said Bangladesh has also to follow the same process to import electricity from India. The Bangladesh authorities had to hire an Indian firm to participate in Indian open market to import power. Now, the officials said, both the Adani Group and Bangladesh government want to avoid this process and follow a new system to directly buy electricity without participating in any auction process. Thats why a new law is required to support the process, said a senior official at the Power Division.
A local official who is working with Adani Group said the issue of enacting a new law by India to create an opportunity for such deal came up for discussion in the Bangladesh-India joint steering committee meeting on power sector development that took place in Dhaka on July 13 last.
The Bangladesh side has requested the Indian power secretary to expedite his government process to enact the law to facilitate its future deal with Adani Group. The Indian secretary also assured Bangladesh of discussing the matter with Indian policymakers, said the official.
