Summit Power Ltd (SPL), the largest private power producer in Bangladesh, is set to shut down three of its power plants – Rupganj, Maona, and Ullapara – starting April 1, as the Bangladesh Rural Electrification Board (BREB) has decided not to renew their power purchase agreements (PPAs). These plants, which have a combined capacity of 77MW, have been supplying electricity to BREB since 2009 under 15-year contracts that expired between March and June of last year, reportedly.
In its 2023-24 annual report, Summit stated that it had formally requested an extension of the PPAs for all three plants. While negotiations were ongoing and BREB initially issued a consent letter, allowing Summit to continue power supply temporarily, the final decision has now been made against renewal.
According to a letter dated March 11, BREB confirmed that the agreements would not be extended, leading to the shutdown of the three power plants from April 1, 2025. This update was disclosed by Summit on the Dhaka Stock Exchange (DSE) today. Following the announcement, Summit Power’s shares dropped by 5.10 percent, closing at Tk 14.90 on the DSE.
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During the July-December 2024 period, the company reported a 37.4 percent decline in earnings per share, which dropped to Tk 1.07 from Tk 1.71 in the same timeframe the previous year. However, its net operating cash flow saw an increase.
Summit’s total comprehensive income also fell, reaching Tk 201 crore in the first half of the 2024-25 financial year, compared to Tk 309.25 crore during the corresponding period in the previous year, as per its unaudited financial statement. The company currently operates 15 power plants across Bangladesh, with a total installed capacity of 976MW.
Summit attributed the decline in profits to the non-renewal of PPAs. Additionally, three other power plants, despite having their contracts renewed, are operating under a “no electricity, no payment” arrangement, meaning they do not receive capacity payments.
Furthermore, Summit noted that its income tax expenses have risen due to more power plants coming under taxation following the expiration of their initial PPAs.
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