The signing of the memorandum of agreement (MoA) follows the awarding of the contract to Sembcorp in April 2015 to develop and operate the $300m build-operate-transfer project, which is expected to be the largest gas-fired independent power plant in Myanmar.

Planned to be built in the Myingyan district of the Mandalay division, the power plant will feature efficient technologies for enhanced power output with reduced emissions.

Upon commissioning in 2018, the power generation facility is expected to help address power crises in the country.

According to government estimates, electricity demand over the next 15 years in the country is likely to increase at a compounded annual growth rate of 13%.

Sembcorp Industries group business development and commercial executive vice-president & head Tan Cheng Guan said: "This new facility will provide a reliable source of power which is integral to the country's economic development.

"At the same time, it gives us a foothold to potentially develop other businesses in the country, such as water and urban development. We look forward to working closely with MOEP on this project."

Sembcorp said that the project represents its first investment in Myanmar.

A project company, Sembcorp Myingyan Power Company, has also been launched for the development of the project, which will be funded through a mix of limited recourse project financing and equity.

Sembcorp will have an 80% stake in the project while its partner MMID Utilities will own the remaining 20% interest.

Power generated from the facility will be sold to MEPE under a 22-year power purchase agreement (PPA).

The MEPE is a division under the Ministry of Electric Power of Myanmar (MOEP).