Bangladesh today signed a $ 1.5 billion deal with India's NTPC to build a

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1,320 MW coal-fired power plant, the country's biggest, to help ease acute power shortages.

Bangladesh's state-owned Power Development Board (PDB) struck the 50:50 joint venture deal with India's public sector National Thermal Power Company (NTPC).

Under the pact, a JV company will be floated to install and operate the plant while the PDB and the NTPC will implement the $ 1.5 billion project.

PDB chairman A S M Alamgir Kabir and NTPC chairman Arup Roy Chowdhury signed the agreement here.

Kabir said the plant will be set up at Bagerhat's Rampal and Bangladesh and India will have equal partnership in production.

"We hope to supply electricity to the national grid by 2015," he said.

India's power secretary Uma Shankar said the deal opened up a "great platform" for better cooperation between the two neighbours. The plant is expected to be commissioned by 2015.

Of the total project cost, 70 per cent will be arranged through loans and the rest will be equally shared between the JV partners.

"We expect that the most modern and new technology would be used in setting up the JV power plant that would help Bangladesh minimise its growing need of electricity," Bangladesh's Finance Minister A M A Muhith said.

PDB officials said that cost of per unit electricity will vary from Taka 5 to Taka 7 if existing international market price of coal is taken into account.

"Coal will be imported to run the plant from Indonesia, Australia and South Africa to run the plant...We'll use local coal if we get supply as per the demand of the plant," the PDB chairman said.