A new 1,320-megawatt coal-fired power plant has been built on the banks of the Payra River in Kalapara Upazila of Patuakhali, adding to Bangladesh’s electricity generation capacity. Although all infrastructure work has been completed, the plant’s commercial operation date (COD) has been repeatedly delayed due to complications over coal supply and transmission lines.

To keep the plant operational, the operator — RPCL-Norinco International Power Ltd. (RNPL) — is having to spend more than $12 million, or around BDT 1.46 billion, each month on operating expenses, foreign and local consultancy fees, maintenance, repairs, and administrative costs. That translates to roughly BDT 50 million in daily expenses. The company has already informed the Bangladesh Power Development Board (BPDB) of these losses in a letter.

In its letter, RNPL stated that the delay in starting commercial production would add additional expenses to the project’s total construction cost, significantly raising the overall project expenditure. This increase, the company said, will directly affect the electricity generation tariff. If costs continue to rise, the per-unit cost of electricity produced by RNPL will exceed that of other coal-based power plants. As a result, the average cost of electricity supplied to the national grid could rise, further increasing financial pressure on the sector.

According to officials, the plant’s first unit began test production on March 1, 2025, and has since been generating electricity on a limited scale, while the second unit remains idle. The amount of power currently being supplied to the grid is only about 25 percent of the plant’s total capacity, based on its plant factor.

Asked about the status of RNPL’s commercial operation, BPDB Chairman Engineer Rezaul Karim told Bonik Barta, “The RNPL authorities have informed us about the plant’s commercial production. We have received clearance from PGCB (Power Grid Company of Bangladesh Ltd.) for one unit. The other unit depends on the completion of the evacuation line. We haven’t received any update from PGCB on when that will be completed, so we plan to start taking power from one unit soon.”

When asked whether sufficient coal was available for full-scale production once the plant goes into COD, the BPDB chairman said, “We can’t comment on the coal issue, because that’s managed by them (RNPL). If they can arrange coal and supply electricity, BPDB will buy it. If they can’t, we won’t.”

According to RNPL sources, the coal-based power plant built in Kalapara cost a total of $2.54 billion to construct, financed by China’s Exim Bank. However, since the project failed to begin commercial production on schedule, the lender has decided to suspend disbursements, according to a report by RPCL. The project’s EPC (Engineering, Procurement, and Construction) contractor has also reported financial losses, including costs for keeping experts on-site.

The loan agreement, signed in December 2020, spans 14 years with a four-year grace period that ended on September 27. Under the terms, repayment must begin six months after project completion, meaning the first installment is due by March 2026.

In August, RNPL sent another letter to BPDB, urging immediate steps for commercial operation so the company could begin repaying the Chinese loan. However, RNPL officials said they had not received any response from BPDB.

Meanwhile, due to repeated delays in commercial production, China’s Exim Bank has already sent a letter asking RNPL to pay $53 million in interest on the project loan. It remains unclear whether this payment has been made.

Multiple reliable sources said that while transmission line bottlenecks are often cited as the main obstacle to operating the Payra power plant, the core issue lies with coal supply. More than two and a half years after construction, the government has yet to finalize a dependable coal supplier for the plant. A Singapore-based company, Yongtai Energy Pte Ltd., was selected on technical and financial grounds in the fourth round of bidding, but the contract was never awarded. Later, RNPL initiated a fifth round of tenders for coal imports, but that process is now pending in court, preventing any final decision from being implemented.

Regarding the issue, two officials from the Power Division, speaking on condition of anonymity, told Bonik Barta that the power plant requires a steady and sufficient coal supply, which means securing a long-term supplier. The tender process for coal procurement has been ongoing for two and a half years, but no contractor has been awarded the job. If we start a new tender process, it will take at least four to five months to complete, as it involves deadlines for submission, technical and financial evaluations, and other formal procedures.”

Project officials said that if RNPL’s power plant begins commercial operation before the tender process is finalized, it would not be able to operate for even half a month. The plant needs at least 4 million tons of coal annually, or about 12,000 tons a day. But with the current stockpile, it could run at full capacity for only 17 days.

If commercial operations remain halted for the next five months, RNPL could face a financial loss of around BDT 7.5 billion, according to estimates. However, if the contract is awarded to the company already selected under the existing tender process, coal imports for the plant could begin within one to one and a half months, Power Division officials said.

The first tender for coal imports for RNPL’s power plant was floated in November 2022, and seven companies were shortlisted. However, the process was later canceled due to changes in several tender conditions. A second round was announced on January 15, 2024, with five companies submitting required documents. Singapore-based Yongtai Energy was found to be technically qualified. But the tender was scrapped on August 5, 2024, after the fall of the Awami League government.

After the Interim Government took office, RNPL invited a third round of tenders on November 6, 2024, for coal imports for its power plant. That tender was later canceled as well. In the fourth round, Singapore-based Yongtai Energy was again selected both technically and financially, but RNPL decided to cancel the tender and call for a new one. The final decision regarding the fourth tender is now pending a court verdict.

The first unit of the ultra-supercritical technology-based power plant was connected to the national grid on January 19, 2025, followed by the second unit on April 9. Since then, BPDB has been receiving electricity from the first unit on a limited, trial basis. When asked when the plant would operate at full capacity, RNPL officials declined to comment.

Meanwhile, RNPL’s Director and RPCL’s Managing Director, Dr. Najmus Sayadat, recently wrote to BPDB outlining the company’s projected financial losses. Bonik Barta tried to reach Dr. Sayadat multiple times by phone on October 17 for comment, but he did not respond.