POSCO Engineering and Construction Co. said Thursday that it inked a US$300 million deal to build a power generation plant in Peru.

The contract reached at the South Korean builder's branch office in Incheon calls for the construction of a 720 megawatt gas-fired thermal power plant in Mollendo, some 1,055 kilometers south of Lima.

It said once construction begins, the plant, which is named Nodo for short, will be completed in 26 months.

The contract was signed between Samay 1 S.A., a local affiliate of the Israel-based power company IC Power, and Santos CMI. Santos is a subsidiary of POSCO E&C.

The Israeli company won a larger power plant deal from the Peruvian government late last year and selected the South Korean builder as its partner.

POSCO E&C, the building arm of POSCO, South Korea's largest steelmaker, said it will be in charge of engineering and procurement, with its Latin American subsidiary in charge of construction. 

"The contract is noteworthy because POSCO did not submit the lowest bid price, and we competed with some of the leading engineering and construction companies from around the world," a press release said. The company had prepared to secure the deal since the middle of last year.

POSCO E&C said it hopes the latest contract will help it win other power plant orders in Peru, which is moving to build up its power generation infrastructure. Besides South America, the company said it want to expand its presence in Southeast Asia. (Yonhap)