'The Impact of Power Purchase Agreement (PPA) on the Financial Sustainability of Power Generation Companies'' A Case Study on Haripur Power Limited

Abstract

This internship report titled “The Impact of Power Purchase Agreement (PPA) on the Financial Sustainability of Power Generation Companies: A Case Study on Haripur Power Limited.” has been prepared as a partial fulfillment of the requirements for the Bachelor of Business Administration (BBA) degree at Sonargaon University. The report aims to examine how Power Purchase Agreements influence the financial sustainability of power generation companies in Bangladesh, with a particular focus on Haripur Power Ltd. As a private power producer, the company’s financial health is largely dependent on its contractual arrangement with the Bangladesh Power Development Board (BPDB) through a PPA that defines revenue structure, tariff rates, and payment mechanisms. The study explores how the expiration of the PPA has impacted the company’s financial performance, liquidity, profitability, and overall going concern status. The report employs both qualitative and quantitative methods, including ratio analysis, trend analysis, and review of financial statements. Findings indicate that the PPA provided a stable revenue stream, ensured cost recovery, and supported financial predictability. However, after the expiry of the PPA, Haripur Power Ltd. has faced challenges in maintaining cash flow stability, managing operational expenses, and sustaining profitability. The study concludes that Power Purchase Agreements are crucial instruments for financial sustainability in the power generation industry. It also suggests that companies should develop alternative strategies—such as PPA extensions, new agreements, or diversification—to mitigate financial risks associated with PPA expiration. The report consists of seven chapters: an introduction, company overview, overview of the power sector in Bangladesh, discussion of PPAs, financial analysis, findings and recommendations, and conclusion.