Summit closes Madhabdi plant as power deal with BPDB expires

Summit Power Limited has shut down its Madhabdi Power Plant Unit-2 because of the expiry of the plant's power purchase agreement (PPA) with the Bangladesh Power Development Board (BPDB).

According to the disclosure by the company on the website of the Dhaka Stock Exchange on Sunday, the PPA of the 24.3 MW gas-fired power plant expired on 15 December. The tenure of the agreement was 15 years.

Earlier on 18 February, Summit had applied to the power division of the Ministry of Power, Energy & Mineral Resources (MPEMR) for an extension of the contract for the Madhabdi plant.

Now, the extension application is under active consideration, added the disclosure.

Officials of the company said the shutting down of the plant may affect Summit's revenue and profitability but not significantly as the plant is not that big.

The Summit Power Limited — listed on the stock exchanges in 2005 — had 15 power plants at different locations in the country with a total capacity of 975.96 MW.

This year, including the Madhabdi plant, three power plants were closed because of PPA expiry. 

The company had applied to the power division for extension of all the expired agreements but is yet to get it, said sources.

According to the company's annual report, its 12 power plants are currently active, of which, one will expire in 2022, three in 2023, and four in 2024.

In the last fiscal year, the consolidated revenue of Summit Power increased by 65% year-on-year, thanks to higher power needs during the pandemic.

Also, its consolidated gross profit increased by Tk9.8 crore after meeting operating and fuel costs. 

Its net profit after tax stood at Tk842.9 crore, and earnings per share at Tk5.25, which were Tk848.4 crore, and Tk5.17 respectively in the 2019-20 fiscal year.

The company has recommended a 35% cash dividend for its shareholders.