In India, Gautam Adani’s coal-fired plant reveals how Modi government’s will bends to the dirty fuel

The project, however, will benefit its builder, Gautam Adani, an Indian billionaire who according to Global Energy Monitor is the largest private developer of coal power plants and coal mines in the world. When his companies’ stock peaked in September, the Bloomberg Billionaires Index ranked Adani as the second-richest person on the planet, behind Elon Musk.

For decades, Indian officials have rebuffed Western pleas to phase out coal, a reliable but dirty energy source that produces one-fifth of all planet-warming carbon emissions. India’s fast-developing economy — it is the world’s second-largest consumer of coal and third-largest carbon emitter — must burn coal for several more decades out of necessity, not choice, they say.

“Critics would have us instantly get rid of all fossil fuel sources that India needs to serve a large population,” Adani, 60, told a conference in Singapore in September. “This would not work for India.”

But the story of Adani’s power plant in Godda offers a stark example of how political will in India often bends in favor of the dirty fuel — and the business titan who dominates the country’s coal industry.

More than two dozen interviews with current and former Indian officials, former Adani Group employees, industry executives and experts, and a review of hundreds of pages of company and government documents, including a confidential power purchase agreement, reveal how Indian officials repeatedly facilitated a project that seemed to make little economic sense.

They also illustrate the remarkable influence of a self-made billionaire whose ascent was closely tied to the rise of Narendra Modi, India’s prime minister. In 2015, Modi laid the groundwork for the Godda plant during a state visit to Bangladesh. It was part of a larger pattern.

After a senior Indian official opposed supplying coal at a discount to tycoons, including Adani, he was removed from his job by the Modi administration. When a local lawmaker led a hunger strike to protest the power station, he was jailed for six months.

On at least three occasions, according to officials and documents, the government revised laws to help Adani’s coal-related businesses and save him at least $1 billion. That came even as Modi told the United Nations he would tax coal and ramp up renewable energy.

In response to a detailed list of questions, a spokesman for the Adani Group did not address the Godda plant or Adani’s relationship with Modi but said the company plans to invest heavily in renewable energy and gradually shift away from coal. Modi’s office did not respond to repeated requests for comment. Indian officials have said that they are making an earnest attempt to roll out renewable energy, and that they hope to meet half of India’s electricity needs from those sources by 2030 and aim to reach net-zero emissions by 2070.

Today, the Adani Group owns eight airports and 13 seaports. It has rapidly diversified into the media, defense and cement sectors and even become one of India’s leading renewable energy suppliers. Adani’s net worth skyrocketed from $9 billion in 2020 to $127 billion this month.

Still, more than 60 percent of the Adani Group’s revenue is derived from coal-related businesses, according to his seven publicly traded companies’ quarterly reports and industry experts. Those businesses include four coal power plants, 18 coal mines and a coal-trading operation responsible for a quarter of imports into India, which relies on coal for 75 percent of its power generation.

Even within a portfolio so vast, few assets speak to Adani’s influence like the two cooling towers and a smokestack that loom over the Godda countryside.

One recent morning, after monsoon rains had washed away the dust and heat, a bricklayer named Bachchan Yadav recalled the day Adani representatives first showed up at the local crossing.

That was before villagers found out about the project and rallied against it, before hundreds of police officers charged at protesters with batons and jailed their leader, before Chinese engineers arrived by the busload and a hulking plant replaced what used to be fields of rice and chickpeas.

The villagers were naive then, the bricklayer said. They didn’t know whom or what they were up against.

“Bada aadmi, badi baat,” he sighed.

In June 2015, Modi swept into Dhaka for his first trip to Bangladesh, a friendly neighbor with deep cultural and trade ties to India. Modi’s two-day visit was productive: He led prayers at the Hindu Dhakeshwari Temple, settled a 40-year-long border dispute and inked a $4.5 billion deal for India’s state-owned and private companies to sell electricity to Bangladesh.

One of the power projects would be built by Adani, who had provided a corporate jet for Modi to use during his political campaign and accompanied the newly elected prime minister on his first visits to Canada and France. After Modi’s trip to Bangladesh, that country’s power authority contracted with Adani to build a $1.7 billion, 1,600-megawatt coal power plant. It would be situated 60 miles from the border, in a village in Godda district.

At the time, the project was seen as a win-win.

For Modi, it was an opportunity to bolster his “Neighborhood First” foreign policy and promote Indian business. Modi asked Bangladesh’s prime minister, Sheikh Hasina, to “facilitate the entry of Indian companies in the power generation, transmission and distribution sector of Bangladesh,” according to an Indian Foreign Ministry readout of their meeting.

For her part, Hasina envisioned lifting her country into middle-income status by 2020. Electricity demand from Bangladesh’s humming garment factories and booming cities would triple by 2030, the government estimated.

But the confidential 163-page power purchase agreement obtained by The Washington Post, and reviewed by three industry analysts at The Post’s request, suggests the 25-year Godda deal is hardly favorable for Bangladesh.

After the plant comes online, Bangladesh must pay Adani roughly $450 million a year in capacity and maintenance charges regardless of whether it generates any electricity — a steep price by industry standards, according to Tim Buckley, a Sydney-based energy finance analyst. It’s not clear when Bangladesh will actually receive power, because it has not finished its portion of the transmission line. And the plant may not even be needed: Bangladesh now has 40 percent more power generation capacity than peak demand, according to government figures, thanks to years of investment in coal- and gas-fired power stations.

Then there is the cost of coal, which has tripled since war erupted in Ukraine in late February. Other agreements with foreign power suppliers, also seen by The Post, include clauses that would put a cap on the prices Bangladesh pays if the cost of coal skyrockets, but the Godda agreement stipulates that Bangladesh will pay the market price.

And the coal for Godda will probably be supplied by Adani’s own empire. The project’s environmental paperwork shows that 7 million tons a year will be transported from overseas. Industry analysts say the coal will probably come on Adani ships to an Adani-owned port in eastern India, then arrive at the plant on a stretch of Adani-built rail. The electricity generated will be sent to the border over an Adani-built high-voltage line. Under the contract, shipping and transmission costs will be passed on to Bangladesh.

All told, Bangladesh would buy Adani’s electricity at more than five times the market price of bulk electricity in the country, according to Buckley, a longtime energy analyst at major financial firms who focuses, in part, on South Asian markets. Even with coal prices returning to prewar levels, he said, Adani’s power would cost Bangladesh 33 percent more per kilowatt-hour than the publicly disclosed cost of running Bangladesh’s domestic coal-fired plant.

When compared with that of Bangladesh’s Kaptai solar farm, Adani’s power could be five times as expensive.

“It’s an absolute gouge,” Buckley said.

Hasan Mehedi, a Bangladeshi environmental campaigner who tracks the power industry, said 60 percent of his country’s power plants sit idle on a typical day. He added that the Godda plant will further tie Bangladesh’s future to coal.

“It kicks out space for solar, which is cheaper,” Mehedi said. “But poor communities in one of the hot spots in the global climate crisis will pay more for coal power they don’t need.”

Facing a looming power glut, Bangladesh in 2021 canceled 10 out of 18 planned coal power projects. Mohammad Hossain, a senior power official, told reporters that there was “concern globally” about coal and that renewables were cheaper.

But Adani’s project will proceed. B.D. Rahmatullah, a former director general of Bangladesh’s power regulator, who also reviewed the Adani contract, said Hasina cannot afford to anger India, even if the deal appears unfavorable.

“She knows what is bad and what is good,” he…