In a joint venture with India, a power plant will be set up in Bangladesh in three years to produce 1,320 MW. Two coal-fired units with production capacity of 660 MW each will be built in Khulna district, 180 km southwest of Dhaka. A bilateral document prior to signing of a Memorandum of Understanding (MoU) regarding the matter is expected to be signed later Saturday.

The two countries also agreed to establish a cross-border power grid, for which tenders will be invited this month and work order will be issued in June. The decisions were taken Friday at the second meeting of the Bangladesh-India Joint Steering Committee on Power Sector which was formed during Prime Minister Sheikh Hasina's visit to New Delhi last month.

NTPC of India will carry out a feasibility study for the plant and submit a report to the Bangladesh government by July. The project is expected to be completed between 36 and 48 months of issuing the work order, The Daily Star reported. Friday's meeting was held between Bangladesh's Power Division Secretary Abul Kalam Azad and India's Power Secretary H.S. Brahma, who came to Dhaka with a delegation Thursday.

"We want to gather experience regarding coal based power plants, since in future we will have to set up several such power plants to utilise the coal deposits of the country," Azad said in a joint press conference after the meeting.

Estimated investment for the plant is $1.5 billion to $1.7 billion. However, "we are not able to give you the exact figure until the feasibility study is finished", he said.

The cross-border power grid will take two years to be set up after the work order is issued. Forty five km of the power line will be in Bangladesh and the remaining 85 km will be in India, he said, adding that the line could be used for importing power from the private sector of India as well since the agreement allows private partnership from both countries in the power sectors of each other.

"It might be possible to begin importing 250 MW of power from India from June 2012." Brahma said power will be sold to Bangladesh at the rate paid by various states in India.