PURSAT, Cambodia - The 120-megawatt Atai hydropower plant and its transmission line invested and built by China Datang Corporation were inaugurated on Thursday.

The inauguration was presided over by Cambodian Prime Minister Hun Sen and Chinese Ambassador to Cambodia Bu Jianguo, and attended by some 10,000 people.

The hydropower dam cost $255 million and the grid cost $113 million transmitting power to Phnom Penh City, Kampong Chhnang, Pursat and Battambang provinces, Minister of Mines and Energy Suy Sem said at the ceremony.

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The dam project began construction in 2008 and completed last year under a 34-year concessional contract of build-operate-transfer (BOT) with the Cambodian government, he said.

Addressing the ceremony, Hun Sen said the power plant was a huge achievement for Cambodia and expressed gratitude to the Chinese government for encouraging investors to Cambodia.

"Atai dam will increase the capacity of power supply and reduce the country's reliance on diesel-fueled electricity," he said. "It will significantly contribute to developing local economy and reducing poverty."

Hun Sen said the investment in such mega project truly illustrated the confidence of investors in Cambodia's political stability.

"Chinese investors in Cambodia have been playing a very important role in deepening the Comprehensive Strategic Partnership of Cooperation between Cambodia and China," he said.

Atai hydropower plant is located in a remote and jungle area in Pursat province, some 340 km west of capital Phnom Penh.

Wang Yeping, vice chairman of China Datang Corporation, said the Atai hydropower dam is capable of generating electricity of 465 million kWh per year.

"I have confidence that the operation of the dam will reduce power shortage in Cambodia and contribute to development of China-Cambodia relations and cooperation," he said at the ceremony.

China Datang Corporation is a State-owned enterprise and one of the world's top 500 companies, he said, adding that besides Cambodia, the firm has also invested in Myanmar, Laos and Kazakstan.

China is the largest investor in hydropower development in Cambodia. According to the Ministry of Mines and Energy, Chinese companies have invested over $1.6 billion in the construction of six dams with a total capacity of 928 megawatts in Cambodia.

So far, five dams have come into operation, and the 246- megawatt Tatai hydropower dam is expected to complete construction next year.