Saudi Arabia’s ACWA Power and South Korea’s Taekwang Power Holdings have inked a $2.2 billion thermal power plant investment deal with Vietnam’s Ministry of Industry and Trade.

ACWA Power said on its website that the 1,200 MW power plant will be built in the Hai Hau district of the Nam Dinh province, around 150km southeast of the capital Hanoi. The agreement will work on a build-operate-transfer basis for 25 years.

The company did not however specify the investment ratio of each firm in the thermal power project, which is scheduled to start in mid-2016.

“This agreement is an important stepping stone for our first project in Vietnam,” said Rajit Nanda, Chief Investment Officer of ACWA Power.

“We acknowledge the support of the Ministry of Industry and Trade for this project, and believe that this marks the start of a long and fruitful relationship between ACWA Power and Vietnam.”