State firms from Bangladesh and India have signed an agreement to build a coal-fired power plant in southern Bangladesh.

The signing ceremony between Bangladesh's Power Development Board and India's National Thermal Power Corp. took place Sunday in the Bangladeshi capital, Dhaka.

The 1,320-megawatt coal-fired power plant will cost approximately $1.5 billion to build.

Bangladesh suffers crippling power shortages as wide as 1,500 megawatts a day. The shortfall is especially severe during the hot summer months, forcing some factories to halt production.