As per the contract, Bharat Heavy Electricals Limited (BHEL) will install the plant within December 2008. The plant will have two units of 120MW generation capacity each.

Electricity Generation Company of Bangladesh (EGCB), a newly created corporate subsidiary of Bangladesh Power Development Board (BPDB), will implement the project.

Asian Development Bank (ADB) will provide $109.864 million (about Tk 769.048 crore) for the project.

The contract value of the project is $108.477 million plus local currency expenditure of Tk 35.31 crore.

BHEL Executive Director Rabindra K.Belapukar and EGCB Secretary Kazi Nazrul Islam signed the deal on behalf of their respective sides.

Power and Energy Advisor Tapan Chowdhury, Indian High Commissioner in Dhaka Pinak Ranjan Chakravarty, Power Secretary AKM Zafarullah, BPDB Chairman ANM Rizwan and EGCB Managing Director Delwar Hossain and ADB Representative Stefan Ekelund were present at the signing ceremony held at PDB head office.

This is the first deal the present caretaker government has signed after assuming office.

Speaking at the signing ceremony, Adviser Tapan Chowdhury said the caretaker government will sign some more contracts in power sector if those are found to be transparent.

"We'll extend all support to BHEL to speed up the implementation of the project… we need electricity at earliest possible time," he said.

This is the second power project obtained by the BHEL in Bangladesh. The first was a 100MW plant at Baghabari in Sirajganj. The project was installed in 2002.

Addressing the function, the BHEL executive director informed that his company is an associate of General Electric Company.

"We've taken all preparations to install the project as per schedule or before the schedule... we understand the sensitivity of electricity in Bangladesh," he said.

Earlier, in October, the project-implementing agency, EGCB, floated a tender in which BHEL and Chinese Harbin Power Engineering (HPE) participated to compete for the project.

But at one stage of bid evaluation, HPE itself withdrew from the bidding and BHEL became the lone competitor.

The EGCB-appointed Netherlands-based consultant KEMA International recommended the BHEL offer and finally, the government and the ADB have approved the Indian company's bid for the project.

According to the project document, the per unit generation cost of the plant will be Tk 2.014 while the BPDB's average generation cost is Tk 1.96 per unit.