NANNING - China Shenhua Group Co Ltd, the country's largest coal producer, has signed an agreement to build Asia's largest thermal power project in southern Guangxi Zhuang autonomous region.

According to the agreement signed with the regional government on Monday, the future plant contracted to be built in about five years will have eight power generators with a capacity of one million kilowatts each.

The regional government expects the project to help ease the region's severe power shortage, as lingering drought in recent years has strained its power supply from hydro-power production in the water resource-rich region.

Zhang Xiwu, chairman of Shenhua, said Guangxi lacks coal mines but has deep-water ports. To ensure the plant's supply of raw materials, Guangxi needs to build four docks with a handling capacity of 100,000 tons each to allow Shenhua's cargo ships to unload coal sent from the company's mines in Indonesia and Australia.

The plant will be built in Beihai, a port city in Guangxi. The city will build a coal storage and handling park with an annual capacity of 30 million tons in Tieshan Port for the thermal power project.