Khulna Power Company Limited (KPCL)
In 1997 the Bangladesh Power Development Board (BPDB) was faced with the challenge to ease a critically short power supply in the South Western Zone of Bangladesh. The electrical demand had been consistently higher than available capacity, and generation costs in the area had been very high due to the low efficiency of existing equipment and the heavy use of expensive, low-availability fuel.
Bangladesh Power Development Board (BPDB) thus signed a Power Purchase Agreement (PPA) in 1997 with Khulna Power Company Ltd (KPCL) to set up a power plant at Khulna to alleviate the severe power crisis as a fast-track solution.
Khulna Power Company Ltd (KPCL) is the first Independent Power Producer (IPP) in the country, established under the Private Sector Power Generation Policy of Bangladesh. KPCL was incorporated on October 15, 1997 as a private limited company. On July 19, 2009 the company was converted into a public limited company.
KPCL was formed with a paid up capital of BDT 2,085.93 million (US$ 44.10 million) and the initial project cost was US$ 96.07 million. KPCL commenced its full commercial operation on October 13, 1998 and since then, it has been supplying uninterrupted reliable power to the national grid.
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.
Khulna Power Company Ltd has two subsidiaries:
1. Khulna Power Company 2 Ltd which was set up on June 22, 2010 for setting up a power plant of 115 MW under a contract with Bangladesh Power Development Board (BPDB) on a rental basis initially for 5 years with a provision for extension of a minimum of 5 years.
2. Khanjahan Ali Power Company Ltd. was set up on July 19, 2010 for setting up a 40 MW power plant under a contract with Bangladesh Power Development Board for supplying electricity on a rental basis initially on a 5 year with a provision for extension. The plant is located at Noapara, Jessore.