The construction of the plant will be completed by 2022.
An MoU has also been signed with Petro Bangla to set up 500 mmscfd LNG terminal at Kutubdia Island near Chittagong in Bangladesh, said Reliance Power in a statement.
The estimated cost of the projects is approximately 1 billion dollar.
Under the agreement Bangladesh will purchase electricity from the project for a period of 22 years at a pre-decided tariff rate equivalent to Tk 5.85 per unit at a total cost of approximately 8 billion dollars.
Energy Adviser to the Prime Minister of Bangladesh Dr Tawfiq-e-Elahi Chowdhury and High Commissioner of India to Bangladesh Riva Ganguly Das were present during the signing of the agreement along with other senior government officials.
Speaking on the occasion Riva Ganguly Das said that country’s economy had grown rapidly over the last five years especially in the power and energy sectors. She said India is committed to help Bangladesh in the journey of becoming a middle-income country by 2021.
The MoU between Reliance and Bangladesh government was signed in 2015 to set up a 3000 MW gas based power plant but it could not be operationalised till now due to complex nature of negotiations.