JAKARTA (Reuters) - Indonesia’s state company PT PAL Indonesia signed an agreement with nuclear power firm Thorcon International Pte Ltd to conduct development study and construction of a 500 mega watt reactor, PAL Indonesia said.

Thorcon “has expressed seriousness” to invest $1.2 billion to build a thorium power plant in Indonesia, it said in a statement on late Wednesday.

The thorium molten salt power plant is currently designed to be 174x66 meters floating facility which PAL said is expected to be built by Daewoo Shipyard & Marine Engineering in South Korea.

PAL Indonesia, which produces warships and commercial vessels, will build the reactor and supporting components designed by Thorcon.

“The thorium molten salt power plant can produce clean energy cheaper than coal, which could be reliable energy system toward a low-carbon economy,” PAL said.