Daewoo Engineering & Construction has signed a contract to build a thermal power plant in Iran, raising its profile to win more orders in the promising Middle Eastern market.

The Seoul-based construction company said Friday that the deal will see the company build a 500-megawatt (MW) combined-cycle power plant in the country's southeastern city of Kerman. The estimated value is some $500 million (550 billion won).

Under the deal with Iran's investment firm Omid, Daewoo E&C will team with the state-run Korea Western Power and Gohar Energy of Iran. The exact terms of the contract are yet to be unveiled.

"Expectations are that we can establish a stable revenue source, as Omid is one of the most influential companies in Iran," a Daewoo E&C spokesman said. "We have taken an upper hand in the Iranian plant industry, which is gaining the spotlight as the next emerging energy market."