ISLAMABAD — Pakistan and China signed a $4.8 billion deal on Tuesday to build a 1,200-megawatt nuclear power plant, Reuters reported quoting local media.

Prime Minister Shehbaz Sharif hailed the investment by China, a country that Pakistan views as its most dependable ally.

Work on the Chashma 5 project would begin immediately, Sharif said on state-run news channel PTV following the signing of the memorandum of understanding between China National Nuclear Cooperation and Pakistan Atomic Energy Commission.

“Investment from China in this project to the tune of $4.8 billion sends a message loud and clear that Pakistan is a place where Chinese companies and investors continue to show their trust and faith,” Sharif said.

The Chashma 5 project will be built in the central province of Punjab. China’s support will help Pakistan make the transition away from reliance on fossil fuels.

Pakistan’s total nuclear energy production capacity rose to 1,400 mw, when the country’s sixth nuclear power plant opened two years ago. Located in the southern port city of Karachi, that 1,100 mw plant was also constructed with Chinese assistance.

Sharif, whose government is desperately struggling to stave off a balance of payments crisis, thanked the Chinese partners for offering a $100-million discount for the latest project.

It is unclear whether the new investment is part of the $65 billion that China has pledged in infrastructure building for Pakistan under its Belt and Road Initiative.

The new project was originally planned to start a couple of years ago, and Sharif expressed thanks to the Chinese side for not rescheduling costs despite the long delay. Instead, he said, the Chinese had disbursed an initial $104.53 million (30 billion Pakistani rupees) to start the project.

CNN has reached out to China National Nuclear Cooperation and the Chinese Ministry of Foreign Affairs for comment. — CNN