POSCO Energy, a unit of South Korea’s top steelmaker POSCO, said Monday a consortium it belongs to has signed a 1.5 trillion won ($1.34 billion) contract to build and operate a combined heat and power plant in the suburbs of Ulaanbaatar, the capital of Mongolia.

The consortium plans to start building the power plant with an annual generating capacity of 450 megawatts in 2015 and complete it by 2019, POSCO Energy said in a statement.

The consortium consists of POSCO Energy, GDF Suez of France, Sojitz of Japan and Mongolia’s Newcom Group, with each of the first three companies holding a 30 percent stake in the project, while Newcom holds the rest, the South Korean company said.

After completing the power plant, the consortium will operate it for 25 years and then transfer it to the Mongolian government, the company said. “This project will contribute to easing power shortage in Mongolia and help (POSCO Energy) expand presence in the Mongolian energy market in the future,” POSCO Energy CEO Hwang Eun-yeon was quoted as saying. (Yonhap)