Baraka Patenga Power (BPPL), which is all set to make its capital market debut to raise Tk 225 crore, has set its sights on becoming the largest player in the country’s private sector power generation, said its chief.
“Our mission is to become the largest power generating company in the private sector by developing more power plants across the country,” Gulam Rabbani Chowdhury, chairman of BPPL, told Dhaka Tribune recently in an interview.
With the new fund, the company plans to ensure quality and uninterrupted electricity supply to the vast majority of the population.
“Hopefully, our generated electricity would contribute to the country's socioeconomic development.”
The private sector now dominates Bangladesh’s power generation.
As of December 2018, its contribution was 54.4 per cent of the total electricity against 45.7 per cent produced by the state-owned power plants.
By the Power Division data, the country's total power generation capacity reached 20,343 MW in the year, of which 11,057 MW came from private sector producers.
The private companies developed 50 power plants with an investment of $12 billion in the ten years to 2018 and many of them planned for further investment.
Established in 2011, BPPL is one such company.
“Baraka Patenga Power intends to play a big role in the government's target to ensure electricity for all by 2021 by installing more power plants,” Chowdhury said.
Of the IPO proceeds, BPPL, whose parent company Baraka Power is already listed on the bourses since 2011, intends to spend Tk 144.3 crore on equity investments in Karnaphuli Power and Baraka Shikalbaha Power, and Tk 74.9 crore to pay back bank loans, said Chowdhury, also known for his contribution in drawing non-resident Bangladeshis' investment.
BPPL holds 51 per cent shares of both the two companies, whose main role is to set up power plants and supply electricity to the national grid.
The lion’s share of the IPO fund would be used in equity investment in Khulna Power and Baraka Shikalbaha Power to settle the deferred obligations for Gen-sets procurements, he said.
“Both the companies, otherwise, would have to look for alternative sources of financing to meet such deferred obligations, which might be much costlier resulting in lower profitability.”
The chairman said that after repayment of long-term debt of BPPL with a portion of the IPO proceeds, the company's profitability would increase as it would lessen the strain on cash flow.
Located at Patenga, Chittagong, BPPL’s plant has a capacity to generate 50 megawatts of electricity.
The plant, which started its commercial operation in May 2014, used eight brand-new Rolls Royce Engine having a capacity of 6.984 MW each.
Besides, the company set up a co-generation secondary power plant with capacity of 3.20 MW, which was brought under operation on April 2015. The plant run by heat recovery with Rolls Royce gensets exhaust gas without burning any fuel.
For the first time in the power sector in Bangladesh, a desulphurisation plant was introduced to the project to reduce sulphur emission to an acceptable low level, according to the company.
The power generating company is now focused on ensuring corporate governance in its all aspects.
To ensure good governance, BPPL has already complied with the requirements of the Corporate Governance Code of Bangladesh Securities and Exchange Commission, he said.
Major initiatives taken by the company to ensure good governance include the appointment of independent directors in the board of the company, formation of an audit committee and nomination and remuneration committee as a subcommittee of the board, appointment of director from holding company, appointment of independent cost and management accounting firm for certifying on the compliance of the Corporate Governance Code.
“Knowledge, contacts and experience. These things are priceless. Most successful businesses evolve from the knowledge of the industry that you have been working in before -- and how successful you were in your previous career.
“You might not have an idea today – but get the most qualifications you can and work as hard as you can in your career – because that will help in the future,” Chowdhury added.
LankaBangla Investments is acting as the issue manager of the company.
