Bangladesh on Monday signed an agreement with India for buying power. The accord, valid for 35 years, was signed between the Bangladesh Power Development Board (BPDB) and the Power Grid Corporation of India Ltd (PGCI) in the presence of Bangladesh Finance Minister Abul Maal Abdul Muhith, Energy Adviser to the Prime Minister Tawfiq-e-Elahi Chowdhury and other high officials of the two countries.

BPDB secretary Azizul Islam and PGCI executive director Arun Kumar signed the deal.

Under the agreement, Bangladesh would buy 500 MW from Indian power plants and import it through the PGCI's regional transmission system.

The power will be transmitted through a 400 Kv switching station and a 400 Kv single circuit line. The PGCI will construct a 400 Kv double circuit line stretching from Bahrampur in India to Bheramara in Bangladesh.

Initially, 250 MW will be made available by India. The transmission is expected to start in 2012.

The terms and conditions as well as the tariff will be set by the Central Electricity Regulatory Commission of India. The agreement, however, has a provision for amending the tariff from time to time. Bangladesh will have to make the payments within one-and-half month from the date of billing.

Mr. Muhith termed the signing of the deal “a dream of regional cooperation coming true.” Mr. Chowdhury said, “This is a small step for Bangladesh and India, but a giant leap for regional cooperation.”

The agreement is the result of a Memorandum of Understanding signed in January, during Bangladesh Prime Minister Sheikh Hasina's visit to New Delhi.