Hanwha Group has signed an $8 billion contract to build a housing complex in a new town of Iraq, the conglomerate said in a statement Thursday.

A formal contract was signed at a state-run office in Iraq on Wednesday, with group chairman Kim Seung-youn taking part in the event, a Hanwha spokesman said.

“Its scale will mark the largest-ever in history in Korea’s overseas construction projects,” he said.

The Iraqi government recently endorsed the business deal under which Hanwha Engineering & Construction will build 100,000 houses in Bismayah, which is slated to become a satellite city of Baghdad.

Group officials forecast that it will take about seven years to complete construction, adding that “the building costs will approach $8 billion.”

The figure of $8 billion exceeds 10 percent of Korea’s overseas construction order plan which totals $70 billion.

Market analysts estimated that the scale of the new town will be equivalent to that of Bundang, south of Seoul.

The group’s project is likely to inspire other local players amid the recent construction boom in the Middle East. Like the 1970s, another construction boom is emerging in the region.

Last March, the government announced that it will support more than 1,200 young adults in finding work and volunteer opportunities in Muslim countries.

By Kim Yon-se (kys@heraldcorp.com)