United Energy extends its power contract for five more years

United Energy Limited, a subsidiary of the publicly listed United Power Generation and Distribution Company Limited, extended its power purchase agreement (PPA) with the Bangladesh Power Development Board (BPDB) for five more years.

The two parties have recently signed the tenure extension contract for the company's 53 MW power plant which is located at Brahmanbaria.

In December last year, the cabinet committee of government purchases approved the power plant's tenure extension.

The 53 MW power plant completed its 10-year tenure on 22 June 2019. On 4 August 2018, United Energy filed an application to the government for an extension.

United Power holds a 99% stake in United Energy. The subsidiary has two power plants. One is the 53 MW power plant and the other is a 28 MW plant located in Sylhet, the contract of which will expire next year.

In the first half of the current fiscal year, United Power's revenue rose by 29% to Tk2,079 crore due to its subsidiary income and increased power consumption.

Its net profit also jumped 25% to Tk699 crore, compared to the first half of the previous fiscal. 

In 2020, United Power acquired two power plants from United Group - United Anwara Power Ltd with a 300 MW capacity, and United Jamalpur Power Ltd with a 115 MW capacity. 

According to its financial statements from 30 June 2020, the company bought 99% shares of each of the power plants at net asset value. 

Since 2016, United Power has been paying over 100% dividends to the shareholders and became a fundamental stock on the Dhaka Stock Exchange (DSE). In the last fiscal year, it had paid a 170% cash dividend to its shareholders.

At the end of Sunday's trading session, its shares closed at Tk251.2 each at the DSE.

The company's sponsors and directors hold 90% shares, where institutional investors have 7.24%, foreign investors 0.02% and general investors have 2.74%.