The investment represents the largest foreign investment in Irkutsk to date, although several smaller projects focusing on the region's aluminum reserves are already in operation.
Roel Pieper, chairman of the European Technology and Investment Research Center, said the project included potassium and coal mining and would employ new "clean" technologies capable of turning coal into fuels such as diesel.
"It's a combination of licensing new technologies, and some that we have developed ourselves," he said. "Turning coal into liquids has been possible for a long time, but it has only become a profitable proposition due to recent innovations."
In addition, the investment includes funding for connecting the project sites to railroad networks in the famously remote region.
The first customers have already been identified in Russia and Western Europe, but Pieper said the long-term focus would likely be China due to its proximity and its growing demand for energy supplies.
Irkutsk governor Alexander Tishanin was to attend a formal signing of the agreement later Friday in Haarlem, the Netherlands.
Pieper said the deal specifies environmental guidelines, and because it is a public/private partnership, he doesn't expect regulatory difficulties like those that have troubled other western investors in Russia, such as Royal Dutch Shell's major project on Sakhalin island.
The time scale for the current investment is three years, and Pieper said he expects larger investors and companies to join the project as its potential becomes clearer.
Pieper was chief executive of Tandem Computers when it was purchased by Compaq in the mid-1990s, and he served on Compaq's board until 1998. Since then he has focused on venture capital projects in the Netherlands and Belgium, and ETIRC focuses on projects with Russia and former Soviet republics.