Under the agreement, the two firms will launch a joint venture (JV) for the construction and operation of the hydropower plant on the Bureya river in Russia’s Far East.

A technical, economical and legal due diligence of the Nizhne-Bureyskaya project will be conducted by the two sides in order to assess its economic efficiency, following which a JV will be finalized for the construction and operation of the project.

RusHydro management board chairman Evgeny Dod said: "The document, we have signed today, is an important landmark in the comprehensive action plan we are realizing to strengthen cooperation with our Chinese partners and attracting Chinese investments into the Russian economy."

CTG president Wang Lin said: "As the largest hydropower enterprises in China and Russia, the positive progress we achieved on the project will strengthen the cooperation in hydropower development between the two countries, reinforce the Sino-Russian strategic cooperative partnership, and bring benefits to the people in the River valley in both Countries."

The agreement is in development of preliminary agreement reached earlier on main conditions of forming the JV and further preparation of shareholder agreement for construction of flood-control hydropower plants on tributaries of the Amur river in the Russian Far East.

Expected to have an annual power generation capacity of 1.65TWh, the Nizhne-Bureyskaya hydro facility has been under construction since 2010.

The project, which will be commissioned in 2016, is designed to regulate uneven spills in the tailrace of the Bureyskaya hydro power project as well as to help prevent flooding.