KPCL stocks shine on extension nod

Khulna Power Company Limited (KPCL) stocks staged a strong rally, aided by reports that the government approved proposals for extending tenure by two years of its two rental power plants.

Shares of the independent power producer jumped almost 10 per cent to Tk 31.90 on the Dhaka Stock Exchange in Thursday’s intra-day trade, making it the biggest gainer on the day.

Earlier, the market regulator BSEC recommended extending the tenure of the listed rental power plants to the government taking the investor interest into account.

The KPCl’s two power plants are 40-MW in Jashore’s Noapara and 115-MW in Khulna’s Goalpara. Along with the two, three more power plants--100-MW Dutch Bangla Power and Associates Ltd in Siddhirganj of Narayanganj, 100-MW of Orion Power Meghnaghat Ltd in Meghnaghat of Narayanganj and 102-MW Summit Narayanganj Power Ltd in Madanganj of Narayanganj—also got extensions from the government on Wednesday.

The government will have to spend Tk 480 crore in two years to buy power from the KPCL’s 40 MW power plant and Tk 1,295 crore from the 115 MW plant.

The tenure of KPCL two power plants expired in 2021, leaving a negative impact on their financial statements.