KOH KONG, Cambodia, Jan. 12 (Xinhua) -- A Chinese-constructed 338-megawatt Russei Chrum Krom River hydroelectric dam, Cambodia' s largest hydropower station so far, commenced operation on Monday after it had been constructed for nearly five years.

Cambodian Prime Minister Hun Sen and Chinese Ambassador to Cambodia Bu Jianguo jointly inaugurated the dam in Mondol Sima district of southwestern Koh Kong province.

The ceremony was also attended by some 1,500 government officials, local authorities and residents.

The project was developed by the giant power company China Huadian Corp for a cost of 495 million U.S. dollars under a contract of a 35-year build-operate-transfer (BOT) with the Cambodian government, Cambodian Minister of Mines and Energy Suy Sem said.

Under terms of the agreement, the plant sells power to the state-owned Electricity of Cambodia at a price of 7.35 U.S. cents per kilowatt hour, he said.

Hun Sen said the dam would increase the capacity and reliability of electricity supply and bring down the price of electricity in the country. "This project is considered as the largest hydroelectric dam in Cambodia so far," he said at the inauguration ceremony.

He expressed sincere and profound thanks to the government of China for encouraging Chinese investors to Cambodia, noting that the investment in energy was vital for socio-economic development and poverty reduction in Cambodia.

China is the largest investor in developing hydroelectric plants in Cambodia. According to the Ministry of Mines and Energy, Chinese firms have invested over 1.6 billion U.S. dollars to build six dams with a total capacity of 928 megawatts in this Southeast Asian nation.

To date, five dams are fully operational, and the sixth dam, a 246-megawatt Tatay River Hydropower Plant in Koh Kong province, will also be put into operation later this year.