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DHAKA, July 18 (Reuters) Bangladesh will receive a loan of about $275 million from the World Bank to finance a new power plant to ease electricity supply shortages that have often sparked violent consumer protests.

The loan, to be offered through the bank's soft lending arm International Development Association, would be used for the Siddhirganj Peaking Power Project (SPPP) plant, the World Bank said in a statement on Tuesday.

The proposed $350-million SPPP plant will reduce gaps in the country's power generation by adding 300 megawatts to the existing grids.

The rest of the project cost would be financed by the Bangladesh government.

Another power station is to be built at Siddhirganj, east of the capital Dhaka, under a project financed by Asian Development Bank.

Its capacity will be 240 megawatts.

''Addressing power sector problems requires time as a supply gap of 2000 mw can be closed only over the course of several years through both public and private sector investment,'' the World Bank said.

''A comprehensive reform plan is needed so that public entities perform better paving the way for donors support and private investment in this sector,'' it added.

Bangladesh will need roughly $10 billion investment per year over the next 10 years to overcome the situation.

At least 20 people, mostly farmers, were killed in clashes with police, mostly in northern Bangladesh early this year, during demonstrations demanding adequate power for irrigation.

Only 30 percent of the country's 140 million people now have access to power.

A World Bank study has said that frequent power failure depleted Bangladesh's gross domestic product (GDP) by around $1.0 billion annually.

The International Finance Corporation (IFC), the private sector arm of the World Bank group, is discussing with the government to serve as transaction advisor for a new private power project in Bangladesh, the World Bank statement said.

($1 = 69.6931 taka) REUTERS SBA PM1822