The parties plan to set up a joint venture (JV) for building the Nizhne-Bureyskaya hydropower plant on the Bureya river in Russia’s Far East.

The companies will identify the economic efficiency of the project by undertaking technical, economical and legal due diligence of the plant.

A JV will then be established to finalize construction and to operate the facility upon its completion.

The project, which is expected to be completed in 2016, will generate 1.65TWh of energy per year.

Apart from power generation, the power plant will regulate uneven spills in the tailrace of the Bureyskaya hydro project and help to avoid flooding of nearby towns and local communities.

RusHydro general director and chairman of the management board 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."