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Nawapara 40 MW (KPCL) HFO Power Plant (Unit 3)

  • 6 days ago
  • 5 min read

Current Status: Retired

Source: Summit Power



Nawapara 40 MW Furnace Oil Power Plant, also known as Khan Jahan Ali Rental Power Plant or KPCL-III, is a reciprocating engine-based power plant situated on the bank of Bhairab River in Nawapara under Abhaynagar Upazila in Jashore District of Bangladesh (Location: 23.0247, 89.4053). It is sponsored by Khulna Power Company Limited (KPCL), a Joint Venture Company (JVC) of Summit Group and United Group, as a Quick Rental power Plant (QRPP) for five years. The sponsor declared its Commercial Operation Date (COD) on 29 May 2011, and, as per the schedule, the power plant was to retire on 28 May 2016. But the phase-out date is rescheduled to 28 May 2024 after 13 years of operation.


Capacity

The installed (gross)  and net capacity of the power plant are 44.50 MW and 40 MW, respectively.


Context

Khulna Power Company Ltd (KPCL), the first private company in Bangladesh, was established as a private limited company in October 1997. On October 13, 1998, the company began its first commercial operation with Unit I, which has a 110 MW capacity.  On July 25, 2010, KPCL Unit III, formerly referred to as Khan Jahan Ali Power Company Ltd. (KJAPCL), engaged in a contractual agreement with the Bangladesh Power Development Board (BPDB). This agreement pertained to the provision of electricity on a rental basis, with an initial period of 5 years and the possibility of renewal for an additional 5 years (United Group).  


The power purchase agreement for KPC Unit III, a 40 MW plant, expired on May 29, 2021. The Bangladesh Power Development Board instructed KPCL to shut them down by June 1, 2021 (BI 2021) after the Ministry of Power, Energy, and Mineral Resources (MOPEMR) said in March 2021 that it would not extend the lease of any rental or rapid rental power plants (DT 2021). 


The sponsor applied for an extension of the Power Purchase Agreement (PPA) to the Ministry of Power, Energy, and Mineral Resources (MOPEMR) even after the completion of 5 additional years of operation (Rahman 2022). According to the recommendation of MOPEMR, the Cabinet Committee on Government Purchase (CCGP) extended the period of the Power Purchase Agreement (PPA) for another two years on 23 March 2022 under the “No Electricity No Pay” (NENP) policy (FE 2022a). Under the new agreement, BPDB will purchase electricity from the power plant at a rate of BDT 16.40 per kWh. As a result, it has to pay BDT 4.60 billion to KPCL in the period (FE 2022b).

After the expiry of the extended Power Purchase Agreement (PPA) on 28 May 2024 (FE, 2022a), the 40 MW Noapara plant stopped supplying electricity to the grid on 24 March 2024 due to contract expiration (Rising BD, 2024). Later, it briefly operated under a “No Electricity No Payment” (NENP) arrangement without guaranteed off-take from May 2024 (The Financial Express, 2024). However, no new long-term PPA was signed and BPDB did not issue dispatch orders, leading to continued shutdown due to lack of demand (Daily Star, 2024). Finally, in May 2025, KPCL confirmed that the supply contract would not be renewed, effectively resulting in permanent cessation of power supply and retirement of the plant (Daily Star, 2025) .


Land Acquisition

The power plant is situated in Noapara, Jessore. The entire KPCL area covers around 2.90 acres of land according to an estimation from google earth.


Finance

The power plant was financed by Standard Chartered Bank, Mauritius (United Group). 


Sponsors

It is sponsored by Khulna Power Company Limited (KPCL), a Joint Venture Company (JVC) of Summit Group and United Group, as a Quick Rental Power Plant (QRPP). In May 2025, Khulna Power Company Limited (KPCL) announced that the electricity supply contract for the Noapara 40 MW power plant had not been renewed by BPDB. Consequently, the sponsor ceased commercial power supply operations from the facility (Daily Star, 2025).


Contractors

The Engineering, Procurement, and Construction (EPC) contractor of the power plant was Neptune Commercial Limited (NCL) which is a subsidiary of United Group of Bangladesh.


Fuel Supply

The plant utilizes Heavy Fuel Oil (HFO) as its primary fuel, supplied by Summit Asia Pacific Pte Ltd and United Energy Trading Pte Ltd under the Fuel Supply Agreement (KPCL, 2020).


Power Generation

With a total generating capacity of 115 MW, the power plant uses five (5) Wärtsilä Finland 20V32 engines, each of capacity 8.9 MW (KPCL, 2020). The plant can generate 40 MW of electricity which will produce 29,900 MW with a 3.4% plant load factor (PLF)  in FY 2021-2022. The estimated cost for BPDB to get electricity from the power plant for the upcoming year will be BDT 60.86 crore (USD 5.5 million, 1 USD = BDT 110.78 according to 26 September 2023). Electricity generation from the plant declined significantly after March 2024 following the expiry of the power purchase arrangement and the absence of dispatch instructions from BPDB. Although the plant was permitted to remain available under the NENP mechanism, no regular electricity generation occurred due to the lack of guaranteed off-take  (The Financial Express, 2024).


Capacity charge

BPDB had to pay the sponsor a total of BDT 601.48 crore capacity charge from its Commercial Operation Date (COD) to FY 2021-2022 as capacity charge. The total power generation of this power plant was 1776.79 gWh and the per unit cost was 13.51 BDT until FY 2021-2022. 


Environment 

Heavy fuel oil (HFO)-based power plants have significant environmental impacts, including greenhouse gas emissions such as sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM). According to Section 12 of the Bangladesh Environment Protection Act 1995, Environmental Impact Assessment (EIA) is obligatory for any industry (MOLJPA 1995). Polluting industries, such as power plants, must undergo an Initial Environmental Examination (IEE) and EIA as directed in the Environmental Conservation Rules 2017 (MOEFCC 1997). But, to date, an IEE or EIA report has yet to be conducted for the power plant. According to the environmental conservation rule 2023 the project falls in the “Orange” indicating it as a moderate harmful project for the environment (MOEFCC 2023). The retirement of the Noapara power plant is expected to reduce emissions of sulfur dioxide (SO₂), nitrogen oxides (NOₓ), particulate matter (PM), and carbon dioxide (CO₂) associated with Heavy Fuel Oil (HFO)-based electricity generation in the surrounding area (Daily Star, 2025).


References


 
 
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