Dhaka, Jan 18 (IANS): China's energy giant PowerChina has signed an agreement and a contract with GCM Resources, a leading British resource exploration company, for development of a coal-fired power plant in Bangladesh.

Both the Joint Venture (JV) deal and the engineering, procurement and construction (EPC) contract were signed at a ceremony in Dhaka on Thursday. The plant would be developed in Bangladesh's Dinajpur district, some 338 km northwest of the capital, Xinhua news agency reported.

The proposed project is part of a broader strategy by GCM to generate 6,000 MW of low cost electricity for the Bangladesh market utilizing domestic coal, the report said.

The power plant, with two units of a capacity of 1,000 MW each, will be built with ultra supercritical technology, which provides lower levels of emissions and delivers the lowest cost of power.

The project would deliver a sustainable power solution for the development and progress of Bangladesh and would have a substantial multiplier effect on the country's economic and social advancement, according to a statement by the companies.

Ding Zhengguo, Chairman of PowerChina International, said they were delighted to be a partner with GCM to deliver an integrated mine and power plant for the people of Bangladesh.

"Completing the JV agreement and EPC contract are very important steps in progressing the combined project. As the power plant contractor, we are committed to a positive relationship with the community and to constructing an environmentally friendly power plant for the benefit of the local people," he said.

Michael Tang PJN, Executive Chairman of GCM, said: "The JV agreement and EPC contract are key milestones for the development of the 2nd proposed 2,000 MW power plant project at the mine site and aligns with GCM's strategy to present a holistic power solution to the government of Bangladesh which can generate 6,000 MW at the lowest cost for the country."

"The Phulbari Coal and Power Project will deliver a significant multiplier effect on the nation's advancement," he added.

PowerChina is an investor and contractor for three large projects in Bangladesh -- two coal-fired power plants with a combined capacity of 1,670 MW and a JV for the Dhaka Elevated Expressway.