Information Document - Dhaka Stock Exchange

(4) Distribution procedure of products or services:KPCL purchases Heavy Fuel Oil from Kuo Oil Pte Ltd. Singapore and generates electricity as its soleproduct and then sells to BPDB in bulk for electricity transmission through the national grid tosouth-western region of Bangladesh.(5) Competitive Condition of the Business:As power sector is a capital-intensive industry, huge investment will be required for generationcapacity addition. Public sector is not in a position to secure this huge investment for powergeneration. currently, at about 170 kWh per capita of energy consumption, Bangladesh ranks amongthe lowest countries in the world in terms of electricity consumption per capita. Its distributionnetworks currently serve only an estimated 43% of the total population of more than 150 million.The severe shortage of electricity supply is due in part to BPDB’s inadequate generation capacity,weak transmission and distribution systems, and operational difficulties at its existing power plants.In addition to the overall demand-supply imbalance, the power sector in Bangladesh is also affectedby a regional imbalance 85% of the country’s generating capacity is located in the eastern zone,where natural gas and associated infrastructure is available. The western zone, where the Plant islocated, has mostly smaller and less efficient power plants running on liquid fuel. The western zonepeak demand is about 1100 MW while its regional generating capacity is only about 600 MW.According to the Power Cell, the Bangladesh Power Development Board generated 3400 MW of thecountry’s 5245 MW of total commercial electricity, or about 64% of the total installed capacity.Over the past several years although the demand of power and gas grew in geometric progression,yet the power sector did not grow as per requirement and gas sector failed to explore its resourcesand developed its reserve. Since natural gas dominates the power sector in Bangladesh, 95% ofelectricity comes from conventional thermal power (primarily natural gas) and the remaining 5%through hydroelectric power. In January 2006, Bangladesh’s first coal-fired power plant begancommercial production at the 250-MW Barapukuria facility in Parbotipur.The installed generation capacity was about 5269 MW (as on June 2007) from a meager 88 MW in1960. Electricity generation grew at about 7% p. a. during last fifteen (15) years compared withaverage annual GDP growth rate of about 5.5%. Notwithstanding the progress made to date,Bangladesh's per capita electricity generation of 165 kWh p.a. is still among the lowest in theworld. About 43% of the population has access to electricity, which is also low compared to manydeveloping countries. This implies that there is scope for significant growth in power sector. Giventhe huge investment requirement for power development in the country, Bangladesh would belooking forward to various sources of finance. The Government has already opened the powersector for private investment and "The Private Sector Power Generation Policy" has beenformulated in 1996. The table bellow depicts power sector at a glance.GenerationInstalled Capacity(a) BPDB(b) IPP & Mixed Sector TotalTotalMaximum Demand ServedTotal3,872 MW1,397 MW5,269 MW3,785 MWNet Energy Generation23,267 MkWhTransmissionTransmission Line230 kV 1,467 Ckt km132 kV 5,578 Ckt kmTotal7,044 Ckt kmCapacity of Grid S/S230/132 kV 5,175 MVA132/33 kV 7,219 MVA23