The Electricity Ministry signed a framework agreement with Sinohydro, a Chinese state-owned hydropower engineering and construction company, to set up a 2100 megawatt pumped-storage hydro plant in Ataka Mount.
The plant will cost two billion dollars.
The project, that will help meet the growing demand on power and increase rates of economic growth, comes as part of the ministry's efforts to diversify sources of energy within coming period.
Head of the Hydro Power Plants Authority Mohamed Osama and head of the Chinese company signed the deal.