Reliance Energy on Wednesday signed the State Support Agreement with Uttar Pradesh for sale of electricity from the world's largest gas-based power plant of 3740 MW at an investment of over Rs 11,000 crore (Rs 110 billion).

"Uttar Pradesh, reeling under acute power shortage, would be the major beneficiary of the project as 40 per cent of the power from the plant is committed to the state," Satish Seth, vice chairman of Reliance Energy, told PTI on phone from Lucknow immediately after signing of the agreement.

The SSA was signed by Seth and Uttar Pradesh Chief Secretary V K Mittal in the presence of Chief Minister Mulayam Singh Yadav and Reliance Energy Chairman and Managing Director Anil Ambani.

After the signing of the agreement, Ambani paid Rs 64 crore (Rs 640 million) to the state government for completion of the process of land acquisition for the project.

The project would be completed in phases and the first phase of 1200 MW is likely to be commissioned in two years from the zero date.

Earlier, the company had proposed procuring natural gas from Reliance Group's Dhirubhai gas fields in the Krishna Godavari basin, off Andhra Pradesh coast, but later it also contemplated sourcing it from other sellers.

All these details are being worked out, the company officials added.

Seth said under the SSA, both the parties -- state government and Reliance Energy -- are committed to give support to each other.

The state government would provide all support for the completion of the project while "from our side, we have committed to give 40 per cent of the electricity to the state government," he said.

Asked about the price of the 40 per cent electricity to be sold to Uttar Pradesh, he said: "This will be decided on the basis of competitive price bidding."

The company has already initiated the process for procuring equipment and other clearance required to kickstart the project.

It had also approached the financial institutions and banks for necessary finances in the ratio of 90:10 of debt-equity.

Earlier, at the time of laying of the foundation stone in Dadri, the site of the project, in February, Ambani had said electricity would be sold to the state at Rs 2 a unit.