Khulna Power shares skyrocket with extension of tenure
Khulna Power Company Limited shares shot up in value on Thursday after the government extended for two years, the tenure of two power plants belonging to the country's first independent power producer.
Its shares closed 9.72% higher and the company was the top gainer of all listed companies at the country's premier bourse – the Dhaka Stock Exchange (DSE).
A senior officer at a brokerage firm, upon condition of anonymity, said there was a lot of demand for Khulna Power shares on Thursday, but many did not sell, so most of the session, the trading of its shares was halted.
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Later, 28 lakh of its shares valued at Tk9.78 crore traded, closing at Tk35 per share.
The shares of Summit Power and Orion Pharma were also on an upward trajectory because the power plants – owned by the two companies – also gained tenure extensions for two years.
On Thursday, Summit Power shares ended 1.03% higher at Tk39.20 and Orion Pharma shares were 3.70% up at Tk106.60 on the DSE.
On Wednesday, the Cabinet Committee on Public Purchase approved a proposal to extend the tenure of five rental power plants for two years.
The five power plants include Khulna Power Company's 40MW Heavy Fuel Oil (HFO) based plant at Noapara in Jashore, and a 115MW HFO-based plant in Khulna's Goalpara.
Orion Pharma's subsidiaries – Dutch Bangla Power and Associates' 100MW HFO-based plant, and Orion Power Meghnaghat Ltd's 100MW HFO-based plant – both located in Narayanganj – are the two others to have gotten tenure extensions.
And Summit Narayanganj Power Ltd's 102MW HFO-based plant in Madanganj of Narayanganj was the fifth plant to get government approval for tenure extension.
The decision was made under a "no-power no-pay" policy, said the finance minister, adding that the government would buy power from these plants only when needed.
Finance Minister AHM Mustafa Kamal told reporters, "These companies had proposed an extension of five years, but we have given approval for two years.
The total cost of the government to buy power from these five plants in two years will be Tk8,804 crore. It plans to purchase power worth Tk1,855 crore from each of the Khulna Power plants and a little more than Tk1,000 crore worth of power from each of the three other companies.
Zillur Rahman Chowdhury, additional secretary of the Cabinet Division, said the tariff on electricity bought from the rental plants has already been brought down to Tk16.41 a unit, which was Tk17.53 earlier.
Mozammel Hossain, company secretary of Khulna Power, said, "We have heard the news in the media but have not received any documents or letter from the government yet."
Last year, the five plants closed after their power purchase agreements had expired and their parent company revenues and profit fell drastically.
In the first half of fiscal 2021-22, Khulna Power did not earn any money as it had to close down its plants.
In the interest of investors, being listed on the capital markets, these companies sought extension of their power plants which were shut down.
The Bangladesh Securities and Exchange Commission also requested the Power Division to extend the tenure of five power plants in the interest of investors.
