Information Document - Dhaka Stock Exchange

(6) Sources and availability of raw materials and the names of the principal suppliers:The Khulna plant consists of two Wärtsilä floating baseload plants named Tiger I and Tiger IIIdesigned for continuous operation and intended for electricity production. Wärtsilä is also providingoperational and maintenance services for the Khulna plant during the duration of BPDB's powerpurchase agreement. The contract includes all aspects of operations and maintenance, which fixedthe long-term operations and maintenance costs for BPDB, and absorbed a good portion of theoperating risk as well enabling BPDB to concentrate on other aspects of their power business.The plant has 110 MW Heavy Fuel Oil fired Diesel engines with Dual fuel capability plant atgoalpara, Khalishpur, Khulna Wärtsilä provides 19 18V32LN Diesel Engines each of 6.5 MW capacitiesare installed on two power Berges. The Barges are permanently moored in manmade lagoonspecially created for the purpose and continuously generates electricity to the National Grid.The project has been in operation since October 1998, with heavy fuel oil as the primary fuel. Itwill use natural gas as it becomes available in the future. The Company is now the only IPP inprivate sector Company which is operated by heavy fuel oil. KPCL was entered into a 15 years FuelSupply Agreement with United Summit Coastal Oil Limited for sourcing, procurement and deliveryof Heavy Fuel Oil (HFO) to the plant. KPCL’s annual requirement of HFO is about 180000 Metric Tonat 80% dispatch. HFO is being procured from Kuo Oil PTE Limited, Singapore, one of the major oilsuppliers in Asia and transported to Chittagong in 17000 MT parcels. The HFO is stored atChittagong and transported to Khulna by Tanker Barges.(7) Sources of power, gas and water:Water: The Company uses close circuit cooling system for its generators and the cooling waterrequirement is very minimal which is supplied from bore well through demineralization plant.Power: The power requirement is met from company’s own generation; however any disruption ismet through supply from BPDB and is required for auxiliary use only.(8) Name of the customer who purchase 10% and more of the company’s products:Power generated by KPCL is sold in bulk to Bangladesh Power Development Board (BPDB) pursuantto the term of 15 years Power Purchase Agreement. BPDB has obligated to purchase the entireelectrical output generated by the Plant pursuant to a 15-year PPA. The revenues are based on atwo-part tariff structure, and are designed to cover fixed and variable costs including debt service,operations and maintenance expenses, fuel costs and a return to investors.BPDB has committed to a minimum take or pay requirement at 50%dispatch factor on a monthlybasis. BPDB’s payment obligations are supported by a letter of credit for two months minimumrevenues. BPDB’s payment obligations are also guaranteed by the Government of Bangladeshpursuant to an Implementation Agreement Revenues are based on a two-part tariff structure - aFuel Tariff (FT) Component, on a pass-through basis, and Other monthly Tariff (OMT) Component tocover all other fixed and variable costs, adjusted for foreign exchange variations.(9) Description of contract with suppliers and customer:• Implementation AgreementThe IA between KPCL and the GoB states that all the company’s transaction related to the projectthat require foreign exchange, including debt servicing and repatriation of earnings, will beinitiated through bank accounts in Bangladesh, however, any payments in foreign exchange toforeign parties may be paid directly through bank accounts of KPCL located outside Bangladesh.The company shall make available to the GoB the statements and accounts reflecting all suchpayments.The GoB ensures that the Bangladesh Bank gives KPCL and its contractors, consents for operatingFCY bank accounts inside Bangladesh (including, without limitation, the payment of all FCYreceived under the Financing Agreements or otherwise by the Company into such accounts and25