The project in southern Myanmar will generate 600 megawatts of electricity, the New Light of Myanmar said, and the deal was signed on Thursday in the reclusive nation's new capital Naypyidaw.

No further detail was given.

Myanmar, which has been ruled by the military since 1962, is under sanctions by the United States and Europe because of its human rights record and long-running detention of democracy leader Aung San Suu Kyi.

But the impact of the sanctions has been weakened as neighbours such as China, India and Thailand spend billions of dollars for a share of Myanmar's energy resources to solve energy problems at home. -- AFP