A joint venture between Summit Group and General Electric of the US has started a test run to supply 240 megawatts of electricity to the national grid to help the country meet its growing demand for power.

Located in the northwestern district of Sylhet, commercial production at the plant is expected to start by May 15, according to Muhammad Aziz Khan, chairman of Summit Group.

The joint venture has signed a deal with the government to produce 222MW of electricity but the simple cycle plant is in fact producing 240MW, he said.

Summit has deployed GE gas turbine, which is the most modern and fuel efficient engine in the world, to produce power.

The plant will go for combined cycle production by September 2015 this year, when it will produce 350MW instead of 344MW as contracted earlier.

The project was financed in part via 15-year loans of $70 million each from the International Finance Corporation, the Asian Development Bank and Jeddah-based Islamic Development Bank.

The loans were provided at an interest rate of around 4.65 percent. The remaining $100 million is equity, of which Summit has provided 80 percent and GE Energy the remaining 20 percent, Khan said.

The plant will use 50 million cubic feet of natural gas per day from the Bibiyana gas field owned by state-run Petrobangla and operated by Chevron. The $310 million projea will raise Summit's electricity output to 1.200MW, which is almost 16 percent of the country's total power generation.

This will take the group's total investment in the power seaor to $1.2 billion.

Summit Group is set to supply another 165MW of electricity to the national grid from later this year.

The elearicity will be supplied from a 110MW power plant in Barisal and another 55MW one in Narayanganj -the construaion work for which is going on in full steam.

The company has also applied to the government seeking an approval for setting up another 350MW power plant in Meghnaghat.

It is also in discussions with the government to set up a joint venture with Power Development Board to establish a 660MW coal-based power plant in Maheshkhali, Khan said.

Bangladesh's current average production capacity of 7,000MW falls far short of its demand for 10,000MW.

About 65 percent of the country's population has access to the national grid, although it produced a record 7,521 MW of elearicity last month.