Chinese investors have begun building a huge power plant in Vietnam, authorities said on Monday.

The Vinh Tan 1 thermal power plant, located in Vietnam's southern Binh Thuan province, is funded by a consortium under China's Southern Power Grid (CSG), China Power International Development (95 percent of investment) and the Power Corporation of the Vietnam National Coal-Natural Industries Corporation.

With an investment of 1.76 billion US dollars, it is the biggest plant of its kind that China has built in Vietnam. Construction will take four years, and operating rights will transfer to the Vietnamese government after 25 years, said CSG head Zhao Jianguo.

"We will try to build a plant that stands at the highest level of China's power building and management," Zhao said. "It will benefit both countries."

Trade and economic cooperation between China and Vietnam has been gaining momentum, with bilateral trade reaching 83.6 billion U.S. dollars in 2014, a year-on-year increase of 27 percent.