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The High Court has ordered Bangladesh Rural Electrification Board (BREB)—the state-owned power distribution utility— to pay dues to Summit Power Limited that supplies electricity to the national grid.
“The company will get more than Tk 631 crore from the BREB as per the order of the High Court,” said the country’s first independent power producer in a filing with the Dhaka Stock Exchange on Monday.
The dues remained unpaid for as many as nine years, sources said in the company.
In 2018, the company had filed a writ petition to the High Court seeking to settle the dues.
After hearing the petition, the court has directed the BREB to pay the dues, according to the company’s auditor which presented the details related to the issue in the board meeting on Sunday.
“If BREB fails to pay the dues, the receivable amount will further increase,” said an official of the company.
Summit Power, a subsidiary of Singapore-based holding company Summit Power International, has been supplying electricity to Bangladesh Power Development Board (BPDB) and BREB under the power purchase agreement (PPA).
The PPA on the supply of electricity from the 102 megawatt Madanganj Power Plant in Narayanganj expired on March 31, 2021. The operation at the duel fuel power plant remained suspended now.
A proposal for extension of the PPA of the plant is under active consideration of the government under the ‘no electricity, no payment’ mechanism, according to Summit Power.
“We’re hopeful that the government will extend the PPA as the country still suffers power shortage. The power plant will resume production,” said an official.
Summit Power Limited, a subsidiary of Singapore-based holding company Summit Power International, owns and operates 15 power plants at different locations in Bangladesh with a total installed capacity of 975.96 megawatt.
On Monday, the company’s share increased slightly 0.43 per cent to Tk46.70 on the Dhaka Stock Exchange.
Earlier, the government had decided not to extend the PPA and to shut down all quick rental power plants by 2024.
“The government has allowed rental power plants on a short-term basis. Now their owners are pursuing long-term agreements, which cannot be accepted in any case,” said BPDB Chairman Belayet Hossain recently.
He said the government still has to purchase electricity at a much higher rate from the private power producers and sell it to the consumers at a lower rate, incurring huge financial losses for the BPDB.
The quick rental power plants owned by different companies came into operation in mid-2011, and got an initial extension by five years in 2016 under the original contract terms.
The quick rental power plants include Summit Power’s 102 MW Madanganj, Orion’s 100 MW Meghnaghat, Dutch Bangla Power’s 100 MW Siddhirganj, and Khulna Power’s 115 MW and Noapara 40 MW plant.
Some of the power plants are listed with the stock exchanges.
Owners of the power plants have been lobbying with the government to extend the tenure of their power plants.
