China National Heavy Machinery has begun work on a $540m hydropower plant in Koh Kong, Cambodia, to reduce electricity shortages in the country.

Koh Kong Industry Department chief Pich Siyun said that the 246MW plant is expected to be complete by 2014, reports BusinessWeek.

Cambodia’s power generation capacity is largely underdeveloped and the country purchases power from neighbouring countries.

Power costs in Cambodia are among the highest in the world with most power plants operating on fossil fuels.