Summit Power sells 102MW power plant as purchase agreement renewal hope dims

Summit Power Limited (SPL), a leading independent power producer in Bangladesh, has sold a 102MW power plant to a UAE-based company, after finding no hope to renew the power purchase agreement with the government for the plant.

SPL has signed an asset purchase agreement with SABSON ENERGY FZCO for the sale and re-export of its Narayanganj Unit I power plant, a heavy fuel oil (HFO)-fired facility.

In a price-sensitive statement filed with the Dhaka Stock Exchange (DSE) today (13 August), SPL said the Narayanganj Unit I plant began commercial operations on 1 April 2011 and had been supplying electricity to the Bangladesh Power Development Board (BPDB) under successive agreements.

After two contract renewals, the latest power supply agreement expired on 22 March 2024. Although operations were extended for an additional two years under BPDB's 29 April 2024 consent letter on a "No Electricity, No Pay" tariff model, no electricity has been dispatched from the plant since 19 August 2024.

BPDB later issued a No Objection Certificate (NoC), confirming that there was no further scope for renewing the power purchase agreement, effectively bringing the plant's operational lifespan in Bangladesh to an end.

In response, SPL's Board of Directors resolved on 8 May 2025 to sell the plant and authorised management to seek potential buyers. After receiving interest from two parties and conducting negotiations, SPL finalised the sale agreement with SABSON ENERGY FZCO, incorporated in Dubai's Jebel Ali Free Zone.

The company's share price closed at Tk14.60 on the Dhaka bourse today.

According to the company's directors' report, Summit Power, along with its subsidiaries, is the leading independent power producer in Bangladesh. Through its associated companies within the Summit Group, SPL owns and operates a total of 18 power plants with a combined capacity of 2,255MW. 

The group also operates Bangladesh's second Floating Storage and Regasification Unit (FSRU) with a capacity of 500 million standard cubic feet per day. Of the 18 power plants, SPL directly owns 15, with a total installed capacity of 976MW.

For the July-March period of FY25, the company reported revenue of Tk3,245 crore, compared to Tk3,029 crore in the same period of the previous year. Its total comprehensive income stood at Tk372.47 crore, down from Tk452.59 crore a year earlier. Earnings per share (EPS) declined to Tk1.46 from Tk2.40 in the same period last year.

The company stated that the decline in EPS was mainly due to the non-renewal of one plant's power purchase agreement, partial operation of another plant due to no demand from the National Load Dispatch Centre, three plants operating under the "No Electricity, No Payment" model, and higher income tax expenses as more plants became taxable.

For FY24, the company recommended a 10% cash dividend for its shareholders.