Singapore’s Sembcorp Industries (SCIL.SI) has signed a joint venture deal with Oman Investment Corp to build a water and power project worth US$1 billion ($1.39 billion).

The joint venture company will build, own and operate the project in Oman with a 15-year contract to supply power and water to the Oman Power and Water Procurement Co, it said in a statement today.

The project will begin commercial operations in the first half of 2012. It will have a gas-fired power plant with a net capacity of 445 megawatts and a seawater desalination unit.

The joint venture company will finance 75% of the project through 17-year non-recourse project finance loans, and the rest by shareholder loans.

The loans will be provided by Standard Chartered Bank(STAN.L), Bank of China (601988.SS)(3988.HK), China Development Bank, BankMuscat (BMAO.OM), KfW-IPEX Bank and Sumitomo Mitsui Banking Corp (8316.T), National Bank of Oman(NBO.O) Mand Bank Sohar (BKSB.OM).