The project will be implemented at $433m under a government-to-government (G2G) deal by the Power China and Hubei Hongyuan Power Engineering Company Ltd joint-venture company.
Power Division’s Rural Power Company Ltd is going to place the proposal.
A Power Division official said a non-binding memorandum of understanding was signed between the Chinese JV firm and the RPCL on October 14.
The project of land acquisition and development for the power plant has already been approved at the Executive Committee on National Economic Council (Ecnec) meeting in June, he said.
The power plant is the part of government efforts to meet the growing demand of power in the country. It will supply power to Dhaka, Naraynganj and Gazaria of Munshiganj.
The project will be financed by the Export Credit Agency (ECA) of China. The ECA is a quasi-government institution that acts as an intermediary between national governments and exporters to issue export financing.
The government plans to set up the coal-based power projects to generate 20,000MW of electricity by 2030. The Power Division has already set a 2,730MW electricity target for the RPCL by the year 2030.
The RPCL is the first Independent Power Producer (IPP) of Bangladesh. It has started a new dimension in power generation in the private sector with 100% local mobilisation of equity investment.
The company has four power plants in Raozan of Chittagong, Kadda of Gazipur, Gazipur and Mymensingh with a total capacity of 437MW.