In an effort to ease a severe energy shortage, Bangladesh has signed a deal with an Indian state-run company to build a $1.5bn coal fired power plant.

The plant is expected to open in 2016 and produce daily 1320 MW of electricity.

Bangladesh relies on decades-old gas fired plants. A daily shortfall of about 2000 MW is blamed for hampering the economy.

With about 3.3 billion tons of coal reserves, the country of 150 million people is looking into options for coal fired power plants.

The government says the economy is expected to grow by more than 6 per cent this year.

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