The transmission of electricity from a 1,600 MW coal-fired plant in India to Bangladesh has stirred controversy in both countries. The Godda plant in India’s Jharkhand state, built by Adani Power Ltd, has drawn criticism in Bangladesh for the “lopsided nature” of the power purchase agreement (PPA), which experts say favours Adani on several fronts. Under the agreement, Bangladesh will pay significantly higher prices for lower-grade coal compared to what it pays for its other coal-based power.
Additionally, Bangladesh is not benefiting from the tax exemption that Adani Power Ltd received when its Godda plant was declared a Special Economic Zone. Critics in India have also questioned the government’s decision to provide “multiple tax benefits” for a private coal plant that will supply electricity to another country at the cost of its environment and people. Despite growing discontent, the Bangladesh government has no intention of revising or getting out of the electricity purchase arrangement. The deal was struck under a controversial Special Act of Bangladesh that allows the government to make unsolicited PPAs. Analysts say Bangladesh opted for the electricity deal as it had major political implications for its ruling Awami League (AL) party, which needed support from India to secure political legitimacy.
