United Payra Power Plant, an associate company of the listed Khulna Power, has begun operation of its 150MW power plant on Monday.
The heavy-fuel-oil based power plant is under an independent power producer (IPP) entity with a power purchase agreement for 15 years with the Bangladesh Power Development Board (BPDB).
The power purchase agreement was signed August 21, 2019 for the power plant situated at Kholishkhali in Patuakhali.
The publicly listed power giant Khulna Power owns 35 per cent of United Payra Power Plant, which, in turn, runs the 150MW power plant on Build Own Operate (BOO) basis.
The news, however, failed to bring any smile to the investors of Khula Power, an associate company of Summit Power. Its stock price closed the week at Tk 46.6, posting less than 1 per cent gain from the day before.
Investors are cautious about this company as the power purchase agreements of a couple of their power plants are set to expire soon, Dhaka Tribune learnt after speaking with several brokers.
The company’s power purchase agreement with BPDB for Unit-II 115MW and Unit-III 40MW will expire on May 29 and June 1.
Previously, the first extended five-year term IPP contract of 110 MW Barge Mounted Power Plant expired on October 12, 2018.
Khulna Power management has applied for an extension of all the purchase agreements for another five-year term, which is under discussion with the BPDB and the government, according to the company annual report 2019-2020.
If the contracts are not renewed, it would cause a big dent to the company.
The stock was trading over Tk 100 per share before the expiration of its first power plant, a few years ago.
Khulna Power posted a profit of Tk 36.3 crore for the July-September quarter last year, which came from the two power plants that are to be expired this year.
