Japanese trading house Mitsui & Co said on Monday it has decided to invest in a $1.6 billion project to build a 2.5 gigawatt(GW) gas-fired combined cycle power plant in Rayong Province, Thailand.

The new project, due to start operation from March 2023, will be 30% owned by Mitsui and 70% by Thai power company Gulf Energy Development. The two companies are already building another 2.5 GW gas-fired power station in Chonburi Province which is due to start supplying electricity from March 2021.

The electricity from the new project will be sold to state-owned Electricity Generating Authority of Thailand (EGAT) for 25 years under a long term contract, Mitsui said.

The feedstock will mainly come from imported liquefied natural gas (LNG), a Mitsui spokesman said.

The decision comes after signing a project financing agreement with banks including the Japan Bank of International Cooperation (JBIC), which will provide a project financing of about $208 million.

The loan is co-financed by the Asian Development Bank (ADB), Export-Import Bank of Thailand (EXIM Thailand) and private banks, covering about $1.36 bln, Mitsui said.