China has signed a preliminary agreement with Pakistan to finance and build a 1.2GW nuclear reactor there worth $4.8bn, CNN reports.

The deal was signed last week between Pakistan’s Atomic Energy Commission and China’s National Nuclear Corporation.

The ceremony was attended by Shehbaz Sharif, Pakistan’s prime minister, who said: “Investment from China in this project to the tune of $4.8bn sends a message loud and clear that Pakistan is a place where Chinese companies and investors continue to show their trust and faith.”

The prime minister is presently facing a range of economic and political difficulties, including a balance of payments crisis, a 38% inflation rate and continuing political turmoil after the ousting of Imran Khan, Sharif’s predecessor.

As a result, the regime will welcome China’s support, which in this case included a $100m discount on the reactor’s price.

Sharif said work on the plant would begin at once, and criticised Khan’s government for delaying its original start date of 2021.

The reactor will be the fifth unit at Pakistan’s Chashma NPP, which is located at the Punjabi town of the same name on the left bank of the River Indus.

It will be a third-generation Hualong One, the design that is set to become the mainstay of China’s domestic nuclear industry and its main export.

Pakistan has six reactors in operation at two sites, Chashma and Karachi, and these make up around 7% of installed capacity. The country has ambitions to build 32 units by 2050, with a total generating capacity of 40GW.