Iraqi Kurdistan, a self-ruled region, has inked a deal with Korean companies to build two power plants. This agreement is a part of an oil exploration deal.

Posco Engineering and Construction will construct a 300MW steam power generation plant in Irbil in three to six months, and a 400kV power transformer in Sulaimaniyah within eight months, reported The Associated Press.

The $700m transaction will be financed by the Korea National Oil Corp (KNOC) as part of its 2008 deal to explore for oil in eight blocks, a statement says.

As per the 2008 deal, KNOC will allocate some of its profits from oil finds for infrastructure projects.

But the central government of Iraq in Baghdad opposes unilateral Kurdish oil deals.