Power Sector Review of Bangladesh

Keeping pace with the growth of economy

Present Scenario
111 15,821 433 80%

No. of Power Plants Grid Capacity (MW) Per Capita Generation (KWh) Access to Electricity (%)

Imported 4.8% 12,922 MW

F.Oil 0.0%

Hydro 1.7%

Coal 1.8%
De-Rated Capacity
*Without Captive
Gas 62.6% 9,507 MW

Installed Capacity
of
HSD 8.5% BPDB Power Plants

Maximum Generation
*as on 18 Oct 2017

HFO 20.5%

Forecast 60,000

12,644 17,304 20,443 25,199 33,708

40,000

24,000

23,000

2017 2020 2022 2025 2030 2020 2021 2030 2040

Year-wise Peak Demand Forecast (MW) Power Generation Plan (MW)
 Power Sector Review of Bangladesh

Incessant supply of power and energy is the prerequisite Apex Institution: Power Division, Ministry of Power,
for the progress of an economy. The importance of Energy & Mineral Resources (MPEMR)
energy is even more supplementary in the context of Regulator: Bangladesh Energy Regulatory Commission
Bangladesh, an emerging economy that has been (BERC)
experiencing rapid economic growth but also has been
experiencing prolonged period of energy crisis. Electricity Generation:
is the main form of energy that is tapped on both private  Bangladesh Power Development Board (BPDB)
and commercial scales in Bangladesh. However, the  Ashuganj Power Station Company Ltd. (APSCL)
country is still at a very low level of electrification.  Electricity Generation Company of Bangladesh
The government of Bangladesh (GOB) recognizes that the (EGCB)
pace of power development has to be accelerated in  North West Power Generation Company Ltd.
order to achieve overall economic development targets (NWPGCL)
of the country and avoid looming power shortages. To  Independent Power Producers (IPPs)
meet the increasing demand for Power, the government Transmission:
of Bangladesh has undertaken massive steps towards
 Power Grid Company of Bangladesh Ltd (PGCB)
increasing the power supply in the short span of time by
encouraging private sector power production as well as Distribution
import of power from native countries. The government  Bangladesh Power Development Board (BPDB)
of Bangladesh has set a target to bring the whole country  Dhaka Power Distribution Company (DPDC)
under electricity coverage by 2021.  Dhaka Electric Supply Company Ltd (DESCO)
The report contains major highlight on ongoing state of  West Zone Power Distribution Company (WZPDC)
power supply in Bangladesh, major steps and new  North-West Zone Power Distribution Co. (NWZPDC)
approvals of power supply as well as financial highlights  Rural Electrification Board (REB) through Rural Co-
of some listed power producing companies. operatives
Present Structure of Power Sector in Bangladesh:
Present Scenario of Power Generation in Bangladesh:
Ministry of Power, Energy and Mineral Resources
Power Generation Situation in Bangladesh
Installed Capacity (Excluding Captive) 13,621 MW
Energy & Mineral Power Division De-Rated Capacity 12,922 MW
Resources Division BERC
Less:
Maintenance and Shut Down 415 MW
Power Cell Gas Shortage 1,415 MW
Low Water Level in Kaptai 0 MW
CEI BPDB REB DPDC DESCO Net Generation Capacity 11,092 MW
Captive Power Generation Capacity 2,200 MW
IPPs
Maximum Generation (18 Oct 2017) 9,507 MW
PGCB APSCL EGCB NWPGCL WZPDCL Source: Bangladesh Power Development Board (BPDB) website

Bangladesh Power Sector at a Glance

2009 2017 8 Years’ Addition
Power Plants (No) 27.0 111.0 84.0
Expired Plants 0.0 3.0 3.0
Grid Capacity (MW) 4,942.0 15,821 (Including Captive) 10,879.0
Highest Generation (MW) 3,268 (6 Jan 2009) 9,507 (18 Oct 2017) 6,239.0
Power Import (MW) 0.0 660.0 660.0
Total Consumers (million) 10.8 26.7 15.9
Transmission Line (Ckt Km) 8,000.0 10,436.0 2,436.0
Distribution Line (Km) 260,000.0 412,000.0 152,000.0
Grid sub-station capacity (MVA) 15,870.0 30,993.0 15,123.0
Access to Electricity (%) 47.0 80.0 33.0
Per Capita Generation (KWh) 220.0 433 (Inc. captive) (30 June 2017) 213.0
ADP allocation (BDT in bn) 26.8 225.8 199.0
System Loss (%) 16.9 12.2 -4.7
Source: http://www.powerdivision.gov.bd (19 September 2017)

Page-1 EBL Securities Limited Research October 26, 2017

Break down of Installed Generation Capacity (MW) Import of LNG by 2018 and implementation of LNG based
Public sector accounts for highest power generation of power project may mitigate the ongoing crisis and can be
the country while the contribution from private sector is an alternative low cost fuel for producing electricity. The
also on the rise driven by the government policy toward government have taken initiatives to supply 1000
increasing power producing capacity at the earliest by MMCFD of Regasified LNG into the Gas Grid using 2
encouraging more private investment in this sector. Out Floating Storage and Regasification Units (FSRU), off the
of the total 15,821 MW power generation capacity of the coast of Maheshkhali.
country as on 30 September 2017, public sectors capacity

Types of Power Plant Based on Fuel Use

stands at 7,476 MW, which is 47% of the total power Natural Gas Based
generation capacity including captive power plants (55%
of total excluding captive power projects) and private
Furnace Oil Based
sector capacity stands at 6145 MW (including 660 MW
power import), which is 39% of the total power
generation capacity of the country (45% of total Heavy Fuel Oil
excluding captive power projects). Besides, power Based
generation capacity of the captive power projects now
High Speed Diesel
stands at 2,200 MW (14% of total capacity).
Based

Coal Fired

Hydro-Based

Furnace Oil, HFO and Diesel based plants are the best
available alternatives for producing electricity. However,
Oil based power plants are highly expensive compared to
Gas based plants. So, Oil based plants are only short term
Source: BPDB & EBLSL research (as on 30 September, 2017) solution to mitigate the supply shortage of power within
Since the country’s overall economic progress relies the shortest period of time.
significantly on uninterrupted supply of power, the Coal is next available alternative. It can be a near term
sectors has always received special attention from the option and can be indigenous or imported. However,
government. However, the country’s power capacity Coal based power projects are highly debated as they
increased significantly since the present ruling party took might be harmful for environment. The government is
charge of the government in 2009 and last nine years’ encouraging coal based projects for mitigating looming
CAGR of the power sector capacity was 10.6% (excluding electricity shortage and to reduce dependency on gas
captive power capacity). based expensive fuel oil based plants.
Power Generation Capacity (Year-wise) Nuclear power is the safe technology; no pollution;
14,000 expected to be future Base Load option (power stations
12,000 which can economically generate the electrical power
10,000 needed to satisfy this minimum demand) but no
8,000
6,000
significant improvement has been observed to generate
4,000 nuclear based power in Bangladesh.
2,000
0
Capacity of BPDB Power Plants as on September 2017
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17

Installed Derated Total (%)

Fuel
Capacity Total (%) Capacity
Installed Capacity (MW) Derated Capcity (MW) Type
Maximum Generation (MW) (MW) (MW)
Source: BPDB annual report and website Coal 250.00 1.84 % 170.00 1.32 %
Primary Fuel Supply Scenario F.Oil 0.00 0.00 % 0.00 0.00 %
Up until 2016, the major consideration of energy source Gas 8529.00 62.62 % 7936.00 61.41 %
for power generation was Natural gas, which is now being HFO 2794.00 20.51 % 2792.00 21.61 %
shifted to Coal and LNG, as the deposited amount of
HSD 1158.00 8.54 % 1134.00 8.78 %
natural gas remains uncertain. Due to no significant gas
discovery in recent years, the country is facing shortage Hydro 230.00 1.69 % 230.00 1.78 %
of gas supply that ultimately discouraging gas based Imported 660.00 4.85 % 660.00 5.11 %
power supply; therefore the government is now looking Total 13621.00 100.00 % 12922.00 100.00 %
for big power plants to be run on Coal or other types of
Energy in the near future.

Page-2 EBL Securities Limited Research October 26, 2017

 Installed Capacity of BPDB Power Plants contract period, based on discount rate, tariff profile
Imported Coal F.Oil restriction and plant factor to be specified during the
Hydro 4.8% 1.8% 0.0%
1.7% solicitation of bids. The evaluation will be based on the
HSD
criteria to be provided in the RFP.
8.5%
HFO
20.5% The sponsors of private power project are required to
Gas provide year wise tariff profile over the contract period
62.6%
in a manner that matches their annual debt service
requirements.
Present Tariff Structure in the Electricity Generation
Coal F.Oil Gas HFO HSD Hydro Imported Sector: Three types of tariffs are in operation in
Source: BPDB website & EBLSL Research Bangladesh:
(i) Bulk or wholesale tariff---the rate at which BPDB
Business Opportunities for Private Sector in Electricity purchases power from the generating entities;
Generation
(ii) Wheeling charges paid to PGCB; and
To encourage private sector for investment in the power
sector of the country, the government of Bangladesh (iii) Retail Tariff---the rate at which the distribution
adopted several policies namely Private Sector Power companies sell to consumers
Generation Policy of Bangladesh, 1996 (revised 2004) The Bulk or wholesale tariff varies based on the power
and Policy Guideline for Enhancement of Private plant types and fuel used.
Participation in the Power Sector, 2008. The government Tariff Range
also took a pragmatic step to revise the Electricity Act Sponsor Fuel
(per KWH)
1910, which has been renamed as Electricity Act 2016, IPP/ Rental HFO 5.5-9.0
where adequate provisions has been kept to facilitate SIPP/Quick Rental HFO 14-20.5
private companies to participate in developing the IPP/SIPP/ Rental/ Quick Rental HSD 21.5-29.8
country’s power sector. IPP/SIPP/ Rental/ Quick Rental Gas 1.45-5.1
Tariff for Bulk Purchase of Power at Busbar Public Gas 1.6-3.35
Public HSD 15.8-27.9
The power produced by the Independent Power
BPDB Hydro 1.1
Producer (IPP) is purchased (as per Power Purchase
BPDB Wind 41.43
Agreement) by BPDB/DESA/REB or any large consumer BPDB Gas 0.94-2.56
EPZs. The Power Cell as the GOB agent indicates which BPDB Coal 8.93
organization will be the power purchaser at the time of BPDB HFO 17.5-22.2
issuance of Request for Proposal (RFP). Electricity BPDB Diesel 33.3-261.5
generation technology, cost structure and tariff varies Source: BPDB annual report and EBLSL estimates
based on the types of fuel used. The tariff structure
Retail Tarif: Present retail tariff in power sector is as
consists of two parts:
presented below:
1. Capacity Payment: This covers debt service, return on
Consumer Category Energy Charges
equity, fixed operation and maintenance cost, insurance
(BDT/KWh)
and other fixed costs. The capacity payment is further
Category -A: Residential
divided into an escalating and non-escalating portions. Life Line: 1-50 Units 3.33
The capacity payment is linked to a certain level of 1 a. First step : from 00 to 75 units 3.80
availability of the power plant which is made known to b. Second Step: From 76 to 200 units 5.14
the bidders at the time of issuance of RFP. The companies c. Third Step: From 201 to 300 units 5.36
will be entitled to capacity payments even if the d. Fourth Step: 301 to 400 units 5.63
government doesn’t buy electricity from them. e. Fifth Step: From 401 to 600 units 8.70
2. Energy Payment: This covers the variable costs of 6. Sixth Step: From 601 to above 9.98
operation and maintenance, including fuel. The payment 2 Category -B: Agricultural pumping 3.82
are further divided into fuel component which are a pass- 3 Category C: Small Industries
through and a non-fuel component which escalates. In a. Flat Rate 7.66
case of pass-through energy payment agreements- b. Off-Peak Time 6.90
respective company procures required fuel oil for its c. Peak Time 9.24
plants on their own and bills to BPDB for liquid fuel 4 Category D: Non-residential (Light & 5.22
payment. It is mentionable here that, there is no impact power)
of price fluctuation in international oil market on the 5 Category E: Commercial & Office
profitability of private power generation companies as its a. Flat Rate 9.80
costs are structured as a pass through item. b. Off-Peak Time 8.45
c. Peak Time 11.98
In the solicited bids, the bidders offer bulk power tariff 6 Category F: Medium Voltage, Generation Purpose (11
based on the capacity payment and energy payment and KV)
also provide the equivalent levelized tariff over the

Page-3 EBL Securities Limited Research October 26, 2017

 a. Flat Rate 7.57 Year-wise Peak Demand Forecast (MW)
b. Off-Peak Time 6.88

33,708
31,873
30,134
28,487
26,838
c. Peak Time 9.57

25,199
23,581
21,993
20,443
18,838
17,304
7 Category G-2: Extra High Voltage General Purpose (132

15,527
14,014
12,644
11,405
10,283
KV)

9,268
8,349
7,518
6,765
6,454
a. Flat Rate 7.35
b. Off-Peak Time 6.74
c. Peak Time 9.47

2010

2026
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025

2027
2028
2029
2030
8 Category H: High Voltage, General purpose (33 KV)
a. Flat Rate 7.49 Source: Power System Master Plan 2010
b. Off-Peak Time 6.82
The gap between actual demand served and the
c. Peak Time 9.52
projected demand remained huge due to lack of supply
9 Category J:Streel light & Water Pump 7.17
of electricity, which resulted from failure to implement
the planned construction of power generation facilities.
Some key terminologies of the private power
Forcast Vs Actual Demand Served (MW)
generation sector are:
10,283
Independent Power Producer (IPP) 8,349
9,268
7,518
• An Independent Power Producer (IPP) is an entity, 6,454 6,765

which is not a public utility, but which owns facilities 7356 7817
to generate electric power for sale to utilities and 6066 6434
4606 4890
end users.
• Implementation agreement is guaranteed by the
government. 2010 2011 2012 2013 2014 2015
PSMP 2010 Planned Actual
Rental & Quick Rental Power Plants (RPP or QRPP): Source: Power System Master Plan 2016
• Rental & Quick Rental power plants are set up to The chart depicts the scenario of gradual increase in the
meet short-term and emergency requirements of a electricity demand each year. However, the gap between
country and are typically commissioned within 4-6 demand and supply remains that necessitates more
months based on available technology. power projects to implement.
• Rental periods are normally 5 years (for QRPP) to 15
years (for RPP depending on the country’s need. Demand & Generation Gap
14, 000 39% 39% 38% 45. 00%

Generally, the power producing equipment are 12, 000 32% 33% 40. 00%

27% 29%
easily moveable and quickly installable.
35. 00%

10, 000
25% 30. 00%

• Implementation agreement is guaranteed by any 8,0 00

25. 00%

20. 00%
6,0 00

utility economic entity not by the government.

4698.5

10,283

11,405

12,644
15. 00%
6,454

6,765

7,518

8,349

9,268
4126

5081

5126

6227

6389

8091

9479
4,0 00

10. 00%

Captive Power Plants (CPP): 2,0 00

5.0 0%

• Captive power plants are those power plants which

0 0.0 0%

2010 2011 2012 2013 2014 2015 2016 2017

operate independent of wheeling to national grid. Demand Forcast (MW)
Maximum Generation (mw)
They are mostly meant by in-house power Generation Gap
generation for industry. Source: BPDB & EBLSL Research
• If excess electricity is generated and transmission The power demand in Bangladesh is projected to be
line to national grid is available, excess power can be 33,708 MW by 2030. However, the government of
sold to utility company subject to the agreement Bangladesh is planning to increase its power generation
between the two. capacity beyond its projected demand to 40,000 MW by
Long Term Power Generation Planning 2030 in order to boost the nation’s fast-growing
economy.
A long term plan of power generation upto 2030 was
Power Generation Plan
made in Power System Master Plan (PSMP)-2010. In the
Year Planned Generation (MW)
PSMP -2010 demand forecast was made based on 7%
2020 23,000
GDP growth rate. The electricity development is required
2021 24,000
to be accelerated to increase access and attain economic
development. The desirable economic growth rate would 2030 40,000
be about 7% p.a. Based upon this study the peak demand 2041 60,000
Source: Power System Master Plan 2016
would be about 17,304 MW in FY2020 and 33,708 MW in
2030. Year-wise Additional Power Generation Plan
Year Public Sector (MW) Private Sector (MW) Total
The PSMP is updated every 5 years due to changes of
2017 1,464 985 1,849
planning perspective. The Power System Master Plan
2018 1,449 803 2,252
(PSMP)-2016, an updated version of PSMP-2010, has
2019 2,645 2,454 5,099
been complied with the strategy of diversifying primary
2020 1,385 2,029 3,414
fuel supply. The plan period for PSMP-2016 is 2016-2041. 2021 2,805 1,464 4,269

Page-4 EBL Securities Limited Research October 26, 2017

 Tender in Progress Present Scenario of Power Sector Capacity Expansion
Sector # of Power Plant Installed Capacity (MW) Projects:
Public 6 866 Short Term Projects: The government of Bangladesh has
Private 38 6,738 been prioritizing on the capacity enhancement of the
Total 44 7,604 country’s electricity generation on immediate basis (but
Contact Sign (New Power Plant) at high cost), for which it is perusing for some rental or
Project No of Power Capacity Already quick rental basis power projects on private ownership
Type Plant Commissioned basis as a short term solution. Moreover, to reduce the
Government 42 11,124 3,917 (27) legislative delay, the government is also permitting some
Rental 20 1,653 1,653 (20) of the private sponsors on unsolicited bid, under special
IPP 38 6,947 2,005 (19) act, to set up power generation stations within the
Total 100 19,724 7,557 (66) stipulated timeframe.
Under-Construction Power Plant
# of Power Plant Installed Capacity (MW)
Public 15 7,151 Under-construction Private Power Plants:
Private 19 4,710 A number of local and multination sponsors received
Total 34 12,061 permission for setting up power plants for which the
Source: http://www.powercell.gov.bd construction work are on progress.

Some Upcoming Private Power Projects

Plant Location Sponsor Fuel MW LOI Issued date Tenure Rate (BDT)
1. Meghnaghat, N.ganj Consortium of Summit Corp. Ltd. & HFO/Diesel/ 530- 25 October 2017 22 Years 2.9546 (Gas);
GE Gas 590 5.478 (HFO),
12.6051 (Diesel)
2. Ashuganj, B.Baria* Midland Power Ltd. (SPCL) Diesel 150 09 August 2017 15 Years 8.2593
3. Keraniganj, Dhaka* APR Energy Ltd. Diesel 300 09 August 2017 05 Years 19.993
4. Keraniganj, Dhaka* Agrico International Project Ltd. Diesel (IPP) 200 09 August 2017 05 Years 19.6680
5. Jaluda, CTG* Acorn Infrastructure Service Ltd. HFO 100 09 August 2017 15 Years 8.2593
6. Noapara, Jessore* Bangla Trac Ltd. Diesel (IPP) 100 09 August 2017 05 Years 19.9930
7. Daudkandi, Comilla* Bangla Trac Ltd. Diesel (IPP) 200 09 August 2017 05 Years 19.9930
8. Bagura* Confidence Power Ltd. HFO (IPP) 113 09 August 2017 15 Years 8.3379
9. Chandpur* Desh energy Ltd. HFO (IPP) 200 09 August 2017 15 Years 8.3379
10. Laban Chora, Orion Power Rupsha Ltd. HFO (IPP) 105 09 August 2017 15 Years 8.3379
Khulna*
11 Kodda, Gazipur* Consortium of Summit Corporation HFO (IPP) 300 09 August 2017 15 Years 8.3379
Ltd. and Summit Power ltd.
12. Kodda, Gazipur Summit Technopolis Ltd, Dual Fuel 149 08 September 7.15 (HFO
(HFO & GAS) 2016 2.80 (Gas)
Purchase of plant
13. GongaChora, Intraco Solar Power Ltd. Solar Power 30 16 March 2016 n/a 12.80
Rangpur
14. Mymensingh* United Enterprise and Company HFO 200 20 September, 15 Years 8.4166
2017
15. Jamalpur United Enterprise HFO 115 30 August 2017 15 Years 8.73
16. Ghorashal China Energy Engineering Group Fuel Oil 210 re-powering
and Guangdong Power
17. Anwara United Enterprise & Company Fuel Oil 300 16 March 2016 15 Years 14.70
18. Julda Acorn Fuel Oil 100 16 March 2016 15 Years 14.70
19. Patia Precision Energy Fuel Oil 100 16 March 2016 15 Years 14.70
20. Bhola India's Shapoorji Pallonji Dual Fuel 225 16 March 2016 n/a 3.98 cents/kWh
Infrastructure Capital Company
21. Gaibandha Beximco Power Limited and Solar Power 200 03 August 2016 20 Years 12.0
Xinjiang TBEA Sunoasis Co Ltd
22. Goainghat., Sylhet Sun Solar Power Plant Ltd Solar Power 05 03 August 2016 n/a 11.12
Bangladesh and Japanese Iki Shoji
Company Limited
23. Khulna Harbin Electric International Co Ltd n/a 200- 03 August 2016 n/a
and Jiangsu Etern Company 300
Limited, China
24. Meghnaghat, N.ganj Reliance Power LNG 750 n/a
25. Shikalbaha, Ctg. Kaqrnaphuli Power Company HFO 110 05 July 2017 15 Years 8.2933
26. Panchaghar 8minutenergy Singapore Holdings 2 Solar Power 50 05 July 2017 20 10.66
Pte Ltd

Page-5 EBL Securities Limited Research October 26, 2017

27. Chandpur Doreen Power HFO 115 15 May 2017 15 Years
28. Rangpur Confidence Cement and Confidence HFO 113 05 April 2017 15 Years 8.21
Steel
29. Bogra Confidence Cement and Confidence HFO 113 05 April 2017 15 Years 8.25
Steel
30. Thakurgaon EnergyPac Bangladesh HFO 115 05 April 2017
31. Meghnaghat Power Association HFO 104 05 April 2017
32. Chowmuhani Energy Prima Limited HFO 113 05 April 2017
33. Feni Lakdhanavi Ltd ., Sri Lanka HFO 114 05 April 2017
*Market represent Fast track projects.

First Track Project of the Ministry of Power and Energy:
The Power Division awarded contracts for the generation
of 1,968 MW of fuel-based power to 12 unsolicited
power projects to meet the country’s electricity demands
next summer. The projects include the production of
800MW of diesel-based electricity at a high cost.
As per the government’s condition, the furnace-oil based
IPPs would have to commence generation with nine
months (before May 9, 2018) and the diesel-based power
plants will have to start generation within six months
(February 16, 2018) from the date of receiving Letter of
Intent (LOI). However, according to a report of local daily,
most of the First Track Projects are not progressing
satisfactorily to generate power before stipulated
timeframe and the worst scenario is with the
international companies.

Progress of the First Track Projects

Source: News extracted from the Independent (BD) on 26 October 2017 and graphical representation by EBLSL Research Team

Intermediate & Long Term Projects: be a total of 2,651 MW of electricity generation from the
Renewable Energy: Presently Bangladesh generates expansion into renewable energy.
233MW of electricity from Renewable energy sources. Planned Electricity Generation for Renewable Energy
The government plans to meet 10% of the total electricity Source 2017 2018 2019 2020 2021 2022
generation from Renewable Energy sources by 2020. For Solar 421 237 195 203 208 1,264
instance, some of the solar projects include a 500 MW Wind 250 350 350 200 200 1,350
Solar Power energy project in Feni, 100MW Solar Photo Biomass 6 6 6 6 6 30
Voltaic based Grid-Connected Power Generation Plant Biogas 1 1 1 1 1 5
which is also in Feni, 200 MW Solar Park in Tekhnaf, Hydro 2 0 0 0 0 2
200MW Grid-tied Solar PV Power Plant in Latshal, 60MW Total 680 594 552 410 415 2,651
and 30MW windmill energy project in Cox’s Bazar and a
1 MW garbage based power plant in Keraniganj and other Coal Based Mega Projects: The coal has been considered
areas. as the prime source of power generation for the long
Currently, there are several other renewable energy term option in PSMP. As a way of low-cost sustainable
development projects running in Bangladesh. If all the power generation option, the government is planning to
projects progress in accordance with their plan, there will increase Coal fired power projects in coming years.
Government plans to set up 25 coal-fired power plants by
2022, to generate 23,692 MW, in order to meet rising

Page-6 EBL Securities Limited Research October 26, 2017

electricity demand. Of the total, 16 will be built by the 1.3% to 21% by 2020 (end of the Seventh Plan) and
public sector and 9 by the private sector. The government subsequently to 50% by FY2030.
plans to increase share of coal based power from only
Some Upcoming Coal Based Power Projects
Name Capacity Executing Agency Expected
Commencement
Moittri Super Thermal Power Project 1320 MW Bangladesh -India JV June,2019
Matarbari Coal Based Power Pant 1200 MW CPGCBL June, 2022
Paira Coal Based Power Plant 1320 MW NWPGCL-China JV December, 2019
G to G Coal Based Power Plant 1320 MW Bangladesh –S. Korea JV June, 2023
Moheshkhali Coal Based Power Plant 1200 MW BPDB June,2024
Moheshkhali Coal Based Power Plant 1320 MW Bangladesh –Malaysia JV June, 2022
Ashuganj 2x660 MW Power Plant 1320 MW APSCL
1,320 MW Coal Based Power Plant 1320 MW BPDB –CHDHK, China JV June, 2021
Banshkhali Coal Power Plant 1320 MW SS Power-1 Ltd and SS Power-2 Ltd. June, 2020
Boropukuria 275 MW PP (3rd Unit) 274 MW BPDB June, 2018
Bangladesh-India Friendship Power Co. Ltd. 1320 MW BPDB & NTPC March, 2021
Mawa, Munshiganj 522MW Coal Power Plant 630 MW IPP June, 2021
Dhaka 635MW Coal Power Plant 635 MW Orion Power Unit-2 December, 2021

Nuclear Energy Projects: As a part of the long term to electricity to its citizens by 2021. The government has
energy generation plan, the government plans to also made large financing deal with Indian and Chinese
generate 4,000 MW electricity from Nuclear Energy government for financing big power projects of the
Source. country.
Financing & Investment in Power Projects: Besides, along with the loan and borrowing from local
To achieve the government’s target to cover the whole banks private sector power plant promoters are also
country under electricity by 2021, the country requires pursuing for concessional rate loans from various foreign
multibillion dollar investments in the power sector. As a banks and other foreign sources.
result, the government is increasingly diversifying the Planned Investment in Power Pjoects (USD billion)
sources of investment. Public Private
2009-16
Small power projects are attracting private sector (Actual) 3.1
3.8
investment while the government is seeking innovative
financing through joint venture and the ECA (Export 2017-21
8.2 7.3
Credit Agency) backed financing for large power projects. (Planned)

The Asian Development Bank (ADB) will also provide a 2022-30

USD616 million (BDT 50 billion) loan to Bangladesh to 27.0 15.0
(Planned)
help the country meet its goal of providing 100% access
Source: Power Division, cited by The Daily Star

Page-7 EBL Securities Limited Research October 26, 2017

 Fiscal Incentives:
 Exemption of corporate income tax for a period of 15
years
 Allowed to import plant and equipment and spare
parts up to a maximum of 10% of the original value of
total plant and equipment within a period of twelve
(12) years of commercial operation without payment
of custom duties, VAT and any other surcharges as
well as import permit fee except for indigenously
produced equipment manufactured according to
international standards
 Repatriation of equity along with dividends allowed
freely
 Exemption from income tax for foreign lenders to such
companies
 The foreign investors will be free to enter into joint
ventures but this is optional and not mandatory
Presence of Private Power Generation Companies in Bangladesh Capital Market
Currently seven companies under private power sector
have active presence in Bangladesh Capital Market.
Besides, few other listed Companies from different other
sectors also have investment in the private power
generation sector of Bangladesh.
Review of Private Power Producers in Bangladesh
Capital market:
Baraka Power Limited: Baraka Power Limited is a joint
collaboration of local and a group of Non Resident
Bangladeshi (NRB) entrepreneurs. The company was
incorporated in Bangladesh on 26 June 2007 as a Private
Limited Company. On 25 September 2008 the Company
was converted to Public Limited Company under the
Companies Act 1994. Currently the company has a 51
MW capacity Gas based power plant which started
commercial operation on October 2009 for a tenure of 15
years. The company has a subsidiary named Baraka
Patenga Ltd. - a 50MW IPP HFO based power plant at
Patenga, Chittagong. The plant started its operation in
2014 for a tenure of 15 years.
Khulna Power Company Ltd.: Khulna Power Company
Ltd. (KPCL) is one of the first Independent Power
Producer (IPP) in the country, incorporated in October
1997 and commenced commercial operation in October
1998. The formation of KPCL Project was initially
sponsored by Summit Group and United Group along
with their foreign partner El Paso Corporation (El Paso),
USA, one of the world’s largest and most diversified
natural gas exploration and pipeline companies and
Wärtsilä Corporation (Wärtsilä), Finland, a leading power
plant manufacturer of the world. In 2008, El Paso, as part
of its global repositioning strategy disposed of its shares
in KPCL to Summit Group and United Group. Later in 2009
Wärtsilä’s share was also acquired by Summit and
United.
Page-8 EBL Securities Limited Research
Facilities & incentives for foreign investors:
 Tax exemption on royalties, technical know-how and
technical assistance for their repatriation
 Tax exemption on interest on foreign loans
 Tax exemption on capital gains from transfer of shares
by the investing company
 Avoidance of double taxation case of foreign investors
on the basis of bilateral agreements
 Exemption of income tax for up to three years for the
expatriate personnel employed under the approved
industry
 Remittance of up to 50% of salary of the foreigners
employed in Bangladesh and facilities for repatriation
of their savings and retirement benefits at the time of
their return
 No restrictions on issuance of work permits to project
related foreign nationals and employees
 Facilities for repatriation of invested capital, profits
and dividends
Currently the company has three power plants in its
portfolio having a total installed capacity of 265 MW. The
initial contractual tenure of KPCL Unit-II and Unit-III
expired in 2016 and the power supply agreements have
been extended for another 5 years since then. The
company became listed with DSE and CSE on April 2010.
Ownership-wise power generation capacity* of
listed Companies
SHASHADNIM,
ORIONPHARM, 55.0
BARAKAPOWER,
76.5
162.0 GBBPOWER,
22.8
DOREENPWR,
174.7
KPCL, 265.0
SPCL, 111.0
UPGDCL, 160.0
SUMITPOWER, 544.6
*Including Contribution from Subsidiary & Associates
Doreen Power Generations and Systems Limited:
Doreen Power Generations and Systems Limited (DPGSL)
was incorporated in 2007 as a private limited company
and converted into public limited company in 2011 and
became listed with the DSE and CSE in 2016. DPGSL has
three power plants for generating and supplying 66 MW
of electricity to BPDB and REB under three PPAs (22 MW
each) for a tenure of 15 years.
It has two subsidiaries namely, Dhaka Southern Power
Generations Ltd. (99.14% owned) and Dhaka Northern
Power Generation Ltd. (98.52% owned). The Commercial
Operation (COD) of those two HFO fired plants having
55MW capacity each started in in 2016.
October 26, 2017
 TICKER Plant Name Ownership Capacity Capacity Fuel Major Contract Contact
(MW) Utilization Used Customer Tenure Expiration
BARAKA POWER 100% 51.00 77.22% Gas BPDB 15 Years 2024
BARAKAPOWER
BARAKA-PATENGA 51% 50.00 68.84% HFO BPDB 15 Years 2029
GBBPOWER GBBPOWER 100% 22.80 100.00% Gas BPDB 15 Years 2023
KPCL-I 100% 110.00 54.66% HFO BPDB 15 Years 2018
KPCL KPCL-ll 100% 115.00 62.26% HFO BPDB 5 Years 2021
KPCL-lll 100% 40.00 55.74% HFO BPDB 5 Years 2021
SPCL 100% 86.00 74.00% Gas BPDB 15 Years 2024
SPCL
Midland Power Co. 49% 51.00 n/a Gas BPDB 15 Years 2028
Ashulia-Savar-1 100% 11.00 70.00% Gas BREB 15 Years 2018
Ashulia-Savar-II 100% 33.75 67.00% Gas BREB 15 Years 2022
Madhabdi-I 100% 11.00 66.00% Gas BREB 15 Years 2018
Madhabdi-II 100% 24.30 63.00% Gas BREB 15 Years 2021
Chandina-I 100% 11.00 68.00% Gas BREB 15 Years 2018
Chandina-II 100% 13.50 72.00% Gas BREB 15 Years 2021
Rupganj- N.ganj 100% 33.00 79.00% Gas BREB 15 Years 2024
SUMITPOWER Jangalia-Comilla 100% 33.00 81.00% Gas BPDB 15 Years 2024
Maona-Gazipur 100% 33.00 86.00% Gas BREB 15 Years 2024
Ullapara 100% 11.00 80.00% Gas BREB 15 Years 2014
SNPL 100% 102.00 65.00% HFO BPDB 5 Years 2021
SNPL II 49% 55.00 n/a HFO BPDB n/a n/a
SBPL-Rupatoli 49% 110.00 n/a HFO BPDB n/a n/a
KPCL-Khulna 17.64% 265.00 n/a HFO BPDB n/a n/a
SMPCL 30% 335.00 n/a Diesel BPDB n/a n/a
DEPZ Plant 100% 88.00 73.00% Gas DEPZ 30 Years 2038
UPGDCL
CEPZ Plant 100% 72.00 80.00% Gas CEPZ 30 Years 2039
Tangail Plant 100% 22.00 65.00% Gas BPDB 15 Years 2023
Narsingdi Plant 100% 22.00 67.00% Gas BPDB 15 Years 2023
DOREENPWR Feni Power Plant 100% 22.00 77.00% Gas REB 15 Years 2024
DSPGL 99.14% 55.00 n/a HFO BPDB 15 Years 2031
DNPGL 98.52% 55.00 n/a HFO BPDB 15 Years 2031
OPML 95.00% 100.00 55.00% HFO BPDB 5 Years n/a
ORIONPHARM
DBPAL 67% 100.00 55.00% HFO BPDB 5 Years 2021
SHASHADNIM EPCL 99.97% 55.00 n/a n/a BPDB 5 Years 2019
*n/a= information not available
Summit Power Limited: Summit Power Limited is a and started its operation in January 2009. It is situated at
concern of Summit Group, one of the leading private Fatehpur, Shahjibazar, Hobigonj. The company signed
sector conglomerates of Bangladesh, comprising more power supply agreement with BPDB in 2008 for a tenure
than twenty business units ranging from power to of 15 years with an 86MW gas fired power plant that
shipping to communications and currently generating started commercial operation in 2009.
1,423 MW of electricity. Summit Power Limited owns and The company has a 90% owned subsidiary company
operates 11 (eleven) power plants at different locations namely Petromax Refinery Limited. The principal activity
across the country having a total capacity of 316.75 MW of this company is production and supply of petroleum
from its fully owned plants. products like liquid petroleum gas, special boiling
Summit sells electricity to the Bangladesh Power point solvent, mineral turpentine, high speed diesel,
Development Board (BPDB) and Bangladesh Rural octane, kerosene and fuel gas to Bangladesh
Electrification Board (BREB) only. The company has 4 Petroleum Corporation. The Company has started its
(four) associates companies which are: Summit Barisal commercial operation on 25 October, 2013. The
Power Limited, a 110 MW HFO fired plant , Summit company also has an Associates Company namely
Narayanganj Power Unit II Limited, a 55 MW HFO fired “Midland Power Co. Ltd” (51 MW Gas based power Plant)
plant, Summit Meghnaghat Power Company Limited where it holds 49% shares. This company has started its
(SMPCL), a 335 MW HFO fired plant and Summit commercial operation on 7 December, 2013.
Chittagong Power Limited (proposed), where Summit GBB Power Ltd: GBB Power Ltd. is an Independent Power
power holds 49%, 49%, 30% and 49% ownership Producer (IPP) in Bangladesh that was incorporated on
respectively. 2006 as a private limited company and subsequently
Shahjibazar Power Co. Ltd.: Shahjibazar Power Co. Ltd., converted into a public limited company on 2008. In
was incorporated as a public limited company in 2007 2007 the company signed an agreement with BPDB to

Page-9 EBL Securities Limited Research October 26, 2017

supply upto 22MW of electricity with its Gas based power initiation, it was known as Malancha Holdings Ltd. The
plant for a tenure of 15 years. The company became installed capacity of DEPZ plant is 86 MW and installed
listed with DSE and CSE in 2012. capacity of CEPZ is 72 MW. Both plant are gas fired. The
United Power Generation & Distribution Co. Ltd.: United Company has 30 year’s agreement with BEPZA and
Power Generation & Distribution Co. Ltd. (UPGDCL) to cope with increased load growth the company is
generates power and deliver to the industries housed increasing its capacity in both DEPZ and CEPZ to 100
within Export Processing Zone (DEPZ & CEPZ). At the MW each and the expansion projects are expected to
complete within this year.
Performance of Power Generation Companies Listed in Bangladesh Capital Market
Sponsors hold majority of the shareholding in most of the listed power producing companies. The company has 11
private power generation companies in Bangladesh, fully owned power plants and 3 more plants in its
excluding BARKAPOWER and GBBPOWER, where general portfolio. Earnings of the DOREENPWR increased
public holds majority of the shares. Currently, significantly due to commencement of two new HFO
SUMITPOWER holds highest paid up capital among the fired power plants a having capacity of 55 MW each.
TICKER Close Price EPS EPS EPS NVPS Shareholding Structure Paid-up
24-Oct-17 Ann. Audited growth Sponsor Govt. Institution Foreign Public (BDT mn)
BARKAPOWER 39.2 3.2 2.65 21% 19.9 19.91% 0.00% 19.56% 0.00% 60.53% 1,740
SUMITPOWER 37.7 3.76* 4.37 -14% 29.0 56.60% 0.00% 25.15% 3.65% 14.60% 10,679
DOREENPWR 123.0 7.57* 0.64 1085% 36.0 75.00% 0.00% 7.89% 0.00% 17.14% 960
GBBPOWER 19.9 1.21 0.85 43% 20.8 30.01% 0.00% 12.02% 0.00% 57.97% 970
KPCL 63.9 5.21 5.96 -13% 25.0 70.59% 0.00% 16.26% 0.90% 12.25% 3,613
UPGDCL 170.5 11.8 10.38 14% 38.6 92.02% 0.00% 3.69% 0.00% 4.29% 3,629
SPCL 133.3 7.4 5.14 44% 33.8 68.03% 0.00% 12.58% 0.00% 18.90% 1,412
DESCO 43.9 1.25 1.12 12% 37.5 0.00% 67.63% 20.25% 0.56% 11.56% 3,976
POWERGRID 54.8 3.2 2.66 20% 83.3 0.00% 76.25% 18.78% 0.39% 4.58% 4,609
*based on 2016-17 year-end declaration
A Comparative Financial Review
Company Fundamentals DOREENPWR SUMITPOWER UPGDCL SPCL KPCL BARKAPOWER GBBPOWER
Market Cap (BDT mn) 11,808.0 40,259.0 61,882.1 18,828.1 23,086.1 6,819.3 1,929.4
Market Weight 0.29% 0.99% 1.52% 0.46% 0.57% 0.17% 0.05%
Free-float (Public + Inst.) 25.0% 43.4% 8.0% 32% 29.41% 80.1% 68.0%
No of shares (mn) 96.0 1067.9 362.9 141.25 361.28 173.96 96.96
52-week Low 99.0 33.0 139.3 131.3 57.4 27.5 14.2
52-week High 158.0 46.7 195.4 162.8 69.8 53.4 26.3
Last Declared Dividend 10%C & 10%B 30%C(18M) 125%C(18 M) 30%C &3%B 75%C (18 M) 15%C & 5%B 15%C (18M)
Financial Information (BDT mn): DOREENPWR SUMITPOWER UPGDCL SPCL KPCL BARKAPOWER GBBPOWER
Sales 4,724.6 6,113.0 5,714.6 8,798.7 8,846.5 3,686.2 521.2
Gross Profit 1,428.8 3,201.3 4,145.0 1,910.0 2,250.9 1,230.7 172.2
Operating Profit 1,244.6 2,857.2 4,285.0 1,756.3 2,148.5 1,105.5 110.0
Profit After Tax 738.7 3,930.4 4,282.7 1,116.7 1,885.8 741.4 118.1
Total Assets 12,872.0 32,246.7 14,109.0 10,197.6 14,767.3 8,536.5 2,178.0
Total Debt (LTD+STD) 7,425.3 - - 4,297.5 4,167.3 3,626.3 57.3
Equity 3,287.0 31,526.8 13,998.0 5,017.9 9,048.1 4,324.4 2,019.4
Retained Earnings 1,199.2 10,965.8 8,322.6 1,775.0 5,109.6 749.9 183.3
Cash 3.9 2,977.4 472.9 488.8 2,076.1 154.0 478.0
Margin:
Gross Profit 30.2% 52.4% 72.5% 21.7% 25.4% 33.4% 33.0%
Operating Profit 26.3% 46.7% 75.0% 20.0% 24.3% 30.0% 21.1%
Pre Tax Profit 15.6% 64.3% 74.9% 15.5% 23.2% 21.8% 23.6%
Net Profit 15.6% 64.3% 74.9% 12.7% 21.3% 20.1% 22.7%
Growth:
Sales 345.6% -2.1% 8.2% 9.5% -11.5% 18.5% 0.6%
Gross Profit 219.3% -12.1% 13.8% 30.5% -23.4% -0.1% -1.3%
Operating Profit 361.8% -5.4% 12.8% 33.1% -16.6% 7.9% -2.6%*
Net Profit 1619.1% 0.8% 11.9% 64.0% -10.9% 7.7% -3.0%*
Profitability:
ROA 11.5% 24.4% 60.7% 21.9% 25.5% 17.4% 10.8%
ROE 44.9% 24.9% 61.2% 44.5% 41.7% 34.3% 11.7%
Leverage:
Debt Ratio 57.7% 0.0% 0.0% 42.1% 28.2% 42.5% 2.6%

Page-10 EBL Securities Limited Research October 26, 2017

Debt-Equity 225.9% 0.0% 0.0% 85.6% 46.1% 83.9% 2.8%
Altman Z Score 3.1 2.1 4.2 4.6 3.1 2.8 1.6
Valuation:
Price/Earnings 17.0 10.3 14.8 18.4 12.3 12.4 16.6
Price/BV 3.8 1.3 4.5 3.8 2.6 1.6 1.0
Price/ Sales 2.5 6.6 10.8 2.1 2.6 1.8 3.7
EV/EBITDA 15.6 9.6 14.3 13.0 11.6 10.2 12.3
EV/Sales 4.1 6.1 10.7 2.6 2.8 3.0 2.9
*GBBPOWER had written off BDT51.7 million in FY2015-16 as liquidated damage which was arisen by reduced payment of electricity bill by BPDB due to short supply of electricity.
As the amount are no longer recoverable, the company wrote-off the amount. However, to compute YoY earnings growth, we ignored this one-off event and made comparison
based on continued operation.

Key Investment Insights

Positive Insights
UPGDCL  The company is increasing its plant capacity 
of DEPZ and CEPZ to 100 MW each from
existing 86 MW (16.3% enhancement) and
72 MW (38.9% enhancement) capacity
respectively which will in operation within
December of 2017. These capacity
enhancement will boost the earnings of the
company.
 UPGDCL has 30 years of power supply 
agreement with BEPZA for both of its plant
with provision for extension of another 30
years of tenure, whereas the agreement
tenure for all other private power plants
ranges from 5 to 15 years of tenure.
 The company has no long term loan currently
in its portfolio that resulted into higher profit
margin for the company.
 UPGDCL enjoys highest profit margins in the
industry. Besides, ROA & ROE of the
company are also significantly higher (60.7%
and 61.2% respectively) than other private
power producers listed in the capital market.
SUMITPOWER  The Consortium of Summit Corporation 
Limited (SCL) and Summit Power Limited
(SPL) is setting up a 300MW HFO fired power
plant where Summit Power shall have 20%
ownership. The project is expected to
commence by June 2018
 Summit Power Ltd. has successfully
completed its amalgamation with its three
subsidiaries, Summit Purbanchol Power
Company Limited (SPPCL), Summit 
Uttaranchol Power Company Limited
(SUPCL) and Summit Narayanganj Power
Limited (SNPL) where the company earlier
held 71.06%, 51.48% and 55.00% ownership.
Implementation of the aforesaid
amalgamation is supposed to enable the
company to reduce operating costs through
increased efficiency.
 Summit Power Ltd. has acquired 64% shares
of Ace Alliance Power Limited, a proposed
149MW Dual Fuel (HFO/Gas) Fired Power
Project at Kodda, Gazipur. The facility will be
implemented on Build, Own and Operate
(BOO) basis for a period of 15 years from the
Negative Insights
Both of the power generation plants of the
company are gas based and recent gas price
hike will adversely affect the operating cost
and thus it may affect the profitability as well.
Gas price for electricity generation plants has
been increased to BDT 3.16 since June 2017
and was increased to BDT 2.99 in March from
earlier price of BDT 2.82
The country is suffering from acute shortage
of Gas and it is said that total gas reserve of
the country will be depleted within next 15
years. Hence, the company might face
difficulties to operate in the absence of
uninterrupted supply of gas.
Any policy level changes like, not extending
the tenure of IPP (Independent power
producer) in the future may drastically affect
the Company’s ability to operate as going
concern.
 As 10 out of the company’s 11 power plants
are gas based, increase in the price of gas will
increase the power generation cost
significantly.
Due to scarcity of gas in the country, there is
a high risk of not extending the tenure of
power supply agreement for gas based plants
after expiration. In such cases, the company’s
revenue as well as profitability might
experience significant decline in future.

Page-11 EBL Securities Limited Research October 26, 2017

 Commercial Operation Date (COD). The
estimated cost for the project would be BDT
6,750.0 million with 70% debt and 30%
Equity funding. The plant is expected to
commence operation from August 2018.
 Finance costs has remarkably reduced
because of payoff of short term loan and
timely repayment of project loan, finance
leases and redeemable preference shares.
Reduction in finance cost has significantly
increased the net profit margin of the
company.
 Other income of the Company went up
during the year especially due to increase in
the dividend income from subsidiaries and
others.
 The company has invested BDT 4.9 million at
Summit Chittagong Power Limited for its
49% ownership. However, the details of the
project has not been disclosed yet by the
company
DOREENPWR  The Consortium of Doreen Power  The company is exposed to high leverage.
Generations and Systems Ltd. and Doreen Interest expense eats up significant portion of
Power House & Technologies Limited is going its operating profit. 40% of operating profit
to set up a new 115 MW capacity HFO fired were paid as financial expenses during the
power plant at Chandpur, Bangladesh. first 9 months of the FY 2016-17.
DOREENPWR has 60% stake in the said  Any disruption in gas supply may hamper
consortium. The project is supposed to productivity as the 3 of the company’s power
commence operation by the end of 2018. plants summing up 66 MW generation
The new project will bring significant jump to capacity are gas based.
the company’s consolidated earnings.
 Commencement of the commercial
operation of two new HFO fired power plants
having 55MW capacity each has started to
contribute to the consolidated financials of
the company and driving the revenue and
net profit growth of the company
significantly. The tariff rate for these two
projects are BDT 6.9898 per kwh.
BARKAPOWER  Karnaphuli Power Limited, a 51% owned  Baraka Power’s Fenchuganj project is gas
subsidiary of the Baraka Power’s subsidiary based. Any disruption in gas supply may
Baraka Patenga Power Limited is setting up a hamper productivity.
110 MW HFO based power plant on BOO  Dollar appreciation may increase the cost of
basis. The project is required to start debt as Baraka Power availed big portion of
operation by the end of 2018. Besides, foreign debt of USD4 mn from IDCOL (Interest
Baraka Power will also directly invest in 25% rate LIBOR+ 5%)3
shares of the Karnaphuli Power Limited,
meaning an aggregate holding of the
company will stand at 51.01% to the new
plant. The project is supposed to create
significant growth in the earnings of the
company, once it come into operation.
 The company has acquired 51% stake of a
100% export oriented newly built Ready-
Made-Garments Factory having 10-line
(woven tops) production capacity by
investing BDT 61.2 million. Total cost of the
acquisition and modification is BDT 400.0

Page-12 EBL Securities Limited Research October 26, 2017

 million, which has been financed through
70:30 debt-equity ratio.
SPCL  SPCL’s 49% owned associate, Midland Power
Company Limited is setting up a 150 MW
HFO fired IPP plant. The project is supposed
to be completed by the end of 2018. Once it
comes into operation, SPCL’s income from
associate will increase significantly.
 The company’s associate, Midland Power Co.
Ltd., will subscribe 20% equity of the 200
MW Grid Tied Solar Park Project by Southern
Solar Power Limited. After implementation
and start of commercial operation of the said
project, there shall have prospective impact
on the profitability of SPCL with around 20.9
MW contribution to the consolidated profit
of SPCL.
 As Petromax is allowed to import
condensate from the international market at
a lower price, it helps the company to reduce
cost.
 Petromax consumed 90% of its allocated
condensate (8350 MT) and produced 7601
MT of diesel unlike many other refineries in
the market that produced diesel of 12%-14%
of the condensate allocated to them.
 As the price of petroleum products has been
revised by the Government on 24 May 2016
the gross revenue of Petromax Refinery Ltd.
(PRL), a 90% owned subsidiary of SPCL, has
increased significantly and will result in a
robust growth in both consolidated revenue
and net profit of the company in FY2016-17.
 Both SPCL and Petromax Refinery Ltd. will be
enjoying tax exemption on its operating
income up to the year 2024 and the year
2020 respectively.
KPCL  The power supply agreement with BPDB has
been extended for another 5 years for KPCL
Unit-II (115 MW HFO based power plant) and
KPCL Unit-III (40 MW HFO based power
plant) with effect from June 01, 2016 and
May 29, 2016 respectively. These extension
of agreements ensured uninterrupted
revenue generation from those two plants
for another 5 years.
 KPCL does not require to make any provision
for tax for the KPCL Unit-II and Unit-III as
according to the agreement, BPDB is
responsible for payment of income taxes,
other taxes, VAT, duties, levies and all other
charges imposed inside Bangladesh on any
payments made by BPDB to the company
from the start of operation.
GBBPOWER  According to the annual report of the
company, the management is looking for
opportunities to set up plants on alternative
fuel-fired engines and/ or sourcing of
Page-13 EBL Securities Limited Research
 As the fuel and power sector is highly
regulated, pricing and investment strategies
are decided by the government. Therefore,
profitability for SPCL and its subsidiary
depend on the Tariffs set by the government.
 The major raw material for generating SPLC’s
electricity is natural gas. Any interruption of
supply of fuel to the power plants will hamper
the production.
 SPCL has the lowest profitability margins
among the listed companies in the sector.
Business diversification with refinery business
caused the minimized profit margins.
Moreover, the debt ratio and debt equity
ratio of the company are pretty higher
compared to other similar companies.
 The company has significant exposure to
foreign exchange volatility risk due to its US
Dollar Accounts, Working capital loan and
interest for acceptance of HFO L/Cs, Service
charges/Handling commission payable to fuel
suppliers, Accounts payables and Accounts
receivable from BPDB. During the third
quarter (3 months) of FY2016-17, the
company experienced BDT 25.2 mn (4.3% of
operating profit) foreign exchange loss due to
devaluation of BDT against USD.
 The extended power supply agreement for
KPCL unit-I (110 MW) with BPDB will expire on
2018. If the agreement is not renewed further
the earnings of the company will fall
drastically.
 The company runs only one gas fired power
plant of 22 MW. Scarcity of natural gas might
remain a key concern for the company.
Besides increase in Gas price will increase the
cost of power generation of the company.
October 26, 2017
 renewable energy in collaboration with  Failure to diversify the business of the
foreign companies. company or expand existing business with
alternative fuel based technology remains a
key concern.

Summary of the Forthcoming Power plants approved for companies listed in Bangladesh Capital Market
TICKER Upcoming Project Details
1. SUMITPOWER 2 (Two) new power plants having installed capacity of 149MW and 300 MW HFO fired power plants are being
constructed where the company has 64% and 20% ownership respectively. Tariff rate for the plants are BDT7.5
and BDT8.3379 per unit and will be operational by the middle of 2018.
2. SPCL SPCL’s 49% owned associate, Midland Power Company Limited is setting up a 150 MW HFO/ Diesel fired IPP
plant at a tariff rate of 8.2593. Besides, Midland Power will also subscribe 20% equity of the proposed 200 MW
Grid Tied Solar Park Project by Southern Solar Power Limited.
3. BARKAPOWER Karnaphuli Power Limited has received LOI for implementation of an 110MW HFO fired power plant where the
company will have 51% ownership. Moreover, the group is also approaching for more power plants but no
further approval from the government has been received yet.
4. CONFIDCEM Three new power plants having 113 MW capacity each are being constructed by the group. Confidence cement
shall have 51% ownership in two 113 MW power plants and its 25% owned associate Confidence Power Ltd. is
setting up another 113MW power plant under the government’s fast track project.
5. DOREENPWR A new 115MW HFO fired power plant is being constructed on which the company shall have 60% ownership.
6. PTL The company has decided to participate in the unsolicited tender under the government’s First Track Project
to develop HSD Based 2X100 MW IPP/Rental Power Plant. However, no approval from the government has
been received yet.
7. ORIONPHARM The company’s 95% owned subsidiary Orion Power Meghna Ghat Ltd. has equity shares in the under-
construction fast tract project of 105MW HFO fired power plant of Orion Power Rupsha Ltd. Detail shareholding
information of the Orion Power Meghna Ghat Ltd. on the said power plant is not available yet.
8. BSRMSTEEL Chittagong Power Company Limited (CPCL), a sister concern of the steelmaker BSRM, will build and operate a
150-megawatt (MW) coal-fired merchant power plant at Mirersarai. However, the company is yet to get
required land allocation from BEBZA for the plant. Both BSRMSTEEL and BSRMLTD shall have ownership in the
plant.
9 SHASHADNIM The company’s subsidiary Energis Power Corporation Ltd. participated in tender for power plant setup. But till
date the company didn't receive any formal information/ approval from the BPDB

Concluding Remark:
Power is the prime mover of any economy. Any big push
of the economy would need uninterrupted power supply.
The provision of adequate and reliable supply of
electricity at a reasonable cost is a pre-requisite to attain
the goal of being a middle income country by 2021. The
government is working relentlessly to increase the
country’s capacity to generate required power. However,
the focus of short term highly expensive power supply
based on rental and quick rental power project need to
change and the government need to look for low cost
sustainable projects for generation of power. Moreover,
uncertainly regarding extension of power supply
agreements remains a key concern for all the rental and
quick rental power projects to continue as a going
concern.

Page-14 EBL Securities Limited Research October 26, 2017

DISCLAIMER
This document has been prepared by the Research Team of EBL Securities Limited (EBLSL) for information only of its clients
residing both in Bangladesh and abroad, on the basis of the publicly available information in the market and own research.
This document has been prepared for information purpose only and does not solicit any action based on the material contained
herein and should not be taken as an offer or solicitation to buy or sell or subscribe to any security. Neither EBLSL nor any of
its directors, shareholders, member of the management or employee represents or warrants expressly or impliedly that
the information or data of the sources used in the documents are genuine, accurate, complete, authentic and correct.
However all reasonable care has been taken to ensure the accuracy of the contents of this document. EBLSL will not take any
responsibility for any decisions made by investors based on the information herein.

ANALYST DISCLAIMER
The person or persons named as the author(s) of this report hereby certify that the views expressed in the research report
accurately reflect their personal views about the subject matters discussed. No part of their compensation was, is, or will
be, directly or indirectly, related to the specific recommendations or views expressed in the research report. The views of the
author(s) do not necessarily reflect the views of the EBL Securities Limited (EBLSL) and are subject to change without any
notice. All reasonable care has been taken to ensure the accuracy of the contents of this document and the author(s) will not
take any responsibility for any decisions made by investors based on the information herein.

ABOUT EBL SECURITIES LTD.

EBL Securities Ltd. (EBLSL) is one of the fastest growing full-service brokerage companies in Bangladesh and a fully owned
subsidiary of Eastern Bank Limited. EBLSL is also one of the top ten leading stock brokerage houses of the country. EBL
Securities Limited is the TREC-holder of both exchanges of the country; DSE (TREC# 026) and CSE (TREC# 021). EBLSL takes
pride in its strong commitment towards excellent client services and the development of the Bangladesh capital markets. EBLSL
has developed a disciplined approach towards providing capital market services, including securities trading, margin loan
facilities, depository services, online trading facilities, panel brokerage services, trading through NITA for foreign investors &
NRBs etc.

EBLSL KEY MANAGEMENT

Md. Sayadur Rahman Managing Director sayadur@eblsecurities.com
Md. Humayan Kabir SVP & Chief Operating Officer (COO) humayan@eblsecurities.com

EBLSL RESEARCH TEAM

M. Shahryar Faiz FAVP & Head of Research shahryar@eblsecurities.com
Md. Asrarul Haque Senior Officer-Research asrarul@eblsecurities.com
Mohammad Rehan Kabir Officer-Research kabir@eblsecurities.com
Tajkera Rahman Officer-Research tajkera@eblsecurities.com
Md. Nazmus Sakib Officer-Research sakib@eblsecurities.com
Md. Mosavvir Al Ashick Officer-Research mosavvir@eblsecurities.com
Asaduzzaman Ashik Officer-Research ashik@eblsecurities.com
Farzana Hossain Laizu Assistant Officer- Research farzana@eblsecurities.com

For any queries regarding this report: research@eblsecurities.com

EBLSL BRANCHES
Head office: HO Extension-1 HO Extension-2 Dhanmondi Branch Chittagong Branch
59, Motijheel C/A (1st Modhumita Building Bangladesh Sipping Sima Blossom (4th Floor) Suraiya Mansion (6th
Floor) 160 Motijheel C/A (2nd corporation (BSC) House # 390 (Old), 3 (New), Floor), Northern East
Dhaka-1000 Floor) Dhaka-1000. Tower Road # 27 (Old), 16 (New), Front Side & Northern
+8802 7119631, +88 02 9569480, 9564393, 2-3, Rajuk Avenue (4th Dhanmondi R/A, Dhaka- West Front Side, 30,
9556539 +88 02 8825236 floor), Motijheel, 1209. Agrabad C/A, Chittagong-
+8802 47111935; FAX: +8802 47112944 Dhaka-1000 +8802-9130268, 4100.
FAX: +8802 47112944 info@eblsecurities.com +880257160801-4 +8802-9130294 +031 2522041-43
info@eblsecurities.com

Page-15 EBL Securities Limited Research October 26, 2017