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The Financial Express

Payra power plant: Govt risks making additional payment

| Updated: January 27, 2021 18:31:45


File photo. (Collected) File photo. (Collected)

The newly-commissioned Payra coal-fired power plant is running at less than half of its capacity from the first day due to transmission bottlenecks and insufficient demand, say officials.

State-run Bangladesh Power Development Board (BPDB) is at risk of paying mandatory rent to the 1,320 megawatt (MW) power plant sponsor, no matter whether it buys electricity or not.

According to the BPDB statistics, the Payra plant generated around 440 MW of electricity during day time and 430 MW during evening peak generation on January 19, 2021.

Consumers' rights activists lamented that the necessary transmission line has yet to be readied, despite the delay in implementing the power plant project.

The existing transmission facility allows the power plant to transmit a maximum of 620 MW of electricity, said a senior official of the Bangladesh-China Power Company Limited (BCPCL) that owns the plant.

When contacted, managing director of state-run Power Grid Company of Bangladesh Ltd acknowledged that his company has yet to complete necessary electricity transmission lines to connect with consumers.

He pledged to complete installing the transmission line by December 2021.

Electricity transmission through the under construction Padma multipurpose bridge is necessary to transmit power from the Payra plant, which is by far the country's largest generating facility, the BCPCL official said.

The second and final unit of the 660 MW Payra power plant in Patuakhali was online in December last year, a year after the initial commissioning schedule.

The first unit launched its commercial operations in May 2020, missing the schedule by around 11 months.

Energy adviser of the Consumers Association of Bangladesh (CAB) Professor M Shamsul Alam said it is an outcome of improper planning, which results in extra burden on consumers.

With the operations of the plant, the country's overall electricity generation capacity from coal-fired power plants stands at around 1,844 MW. It is around 9.0 per cent of the total output of around 20,595 MW, according to the BPDB statistics.

Payra is the country's first power plant to run on imported coal. The BCPCL is now importing coal from Indonesia. It has planned to import coal from Australia too.

The plant is committed to using bituminous and sub-bituminous coal, and its expected efficiency level is 48.05 per cent. It will require around 12,000 tonnes of coal daily to generate electricity.

The consortium of the China Energy Engineering Group, the Northeast Electric Power Construction Co Ltd, and the China National Energy Engineering & Construction Co Ltd was the engineering, procurement and construction (EPC) contractor of the project.

The BCPCL, owner of the Payra coal-fired power plant, inked US$1.56 billion contract with the Chinese consortium on March 29, 2016.

The BCPCL, a 50:50 joint venture between the state-owned North-West Power Generation Company Ltd (NWPGCL) and the China National Machinery Import and Export Corporation (CMC) implemented the power plant project.

The project was implemented on a 30:70 equity debt ratio, meaning that the NWPGCL and the CMC provided 30 per cent fund of the total project cost, and mobilised the remaining 70 per cent from external sources.

The BCPCL provided 20 per cent equity to implement the power plant project, and the remaining 80 per cent is being sourced as loan from Exim Bank of China.

For implementing the project, the government has issued a state guarantee worth $1.0 billion in favour of the Chinese loan, and also allocated around 998.77 acres of land on turnkey basis.

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