India will sell 500 megawatts of electricity to Bangladesh and half of it will be available by the end of 2012 or early 2013, Foreign Minister SM Krishna said on Thursday.
He told reporters at a news conference that India also agreed to install a coal based thermal power plant with 1,300 megawatts (MW) of electricity in Bangladesh's southern Khulna area.
"The connectivity work between the two countries for Bangladesh importing the electricity is going on smoothly while the feasibility study for setting up the coal based power plant has just been completed," Krishna said.
Krishna, who arrived Dhaka on Wednesday on a three-day visit, has met Prime Minister Sheikh Hasina and other senior ministers including the finance minister.
He will also meet President Zillur Rahman and opposition leader Begum Khaleda Zia.
He also hold talks with his counterpart Dipu Moni.
Bangladesh aims to nearly triple power generation to 15,357 megawatts (MW) by the end of 2015 as it scrambles to improve living conditions for its people and to become a middle income country by 2021, Bangladesh Foreign Minister Dipu Moni told at the same news conference.
The plan includes imports of 1,000 MW of power from India, Nepal and Bhutan.
Besides, the south Asian country expects to generate 2,000 MW of electricity from a nuclear power plant, construction of which will begin next year.
"The details of the thermal power plant project fired by coal are under process and things are moving fast," Mohammad Mijarul Quaes, Bangladesh's foreign secretary, told Reuters.
Krishna's visit is also aimed to work out details of a visit to Bangladesh by Indian Prime Minister Monmohan Singh on September 6-7, officials said.
Bangladesh's economy has grown on average at 6% in recent years but the government says it required 8% annual growth to halve the poverty.
"India attaches highest importance to Bangladesh and seeks deep er and strongest relationship between the two countries," the Indian minister said.
He said India wants to import more goods from Bangladesh, which now suffers around USD 3.0 billion annual trade deficit with its neighbour.
The two countries on Thursday signed two agreements -- one promotion and protection of investment, a statement of the Indian foreign ministry said.
"Now the investments of either country would not be nationalized or expropriated except for public purpose and it also provides for repatriation of capital investment, non-operating profits, loan repayments, royalty payments and service fees without delay," it said.
The other agreement will facilitate goods trucks from Bhutan and Nepal to enter Bangladesh through a 200-metre corridor in India.
Dipu Moni said during discussions both countries unequivocally agreed to protect security and strengthen border management to stop terrorism as well as illegal entrance of people, goods, currencies and narcotics.
"Top priority has been given to stop killing of innocent people in the border areas," she said.