STX Heavy Industries Co. announced Thursday that it has signed a 3 trillion won ($2.77 billion) contract to build power plants in Iraq.

The contract was signed in Baghdad at a ceremony attended by STX Heavy Industries chief executive Lee Chan-woo, Iraqi Prime Minister Nouri al-Maliki and Electricity Minister Raad Shallal. 

The company had signed a memorandum of understanding for the contract last month during the Iraqi prime minister’s visit to Korea.

Under the contract, STX Heavy Industries will install 25 100 megawatt diesel power plants across Iraq including Baghdad and Basra. The company plans to complete the project by June next year.

The company said that completing the project would require significant contributions from other STX Group subsidiaries.

STX Heavy Industries said that STX Metal Co. and STX Engine Co. would supply 500 units of 4 megawatt and 7.8 megawatt diesel power generation equipment developed by the group. The company added that the project was expected to lead to significant improvements in STX Group firms operating in engine and related fields.

In addition to the power plant contract, the company said that the Iraqi government was hoping to finalize an industrial plants deal with STX Group within the next month.

Nouri al Maliki was quoted as saying that the Iraqi government would like to sign the final contract for a steelworks complex with a 3 million metric ton capacity and a 500 megawatt gas power plant with STX Group chairman Kang Duk-soo within a month.

STX Group and the Iraqi government signed a memorandum of understanding regarding the construction of the two facilities, estimated to be worth $3 billion, early last year.

By Choi He-suk (cheesuk@heraldcorp.com)