PHNOM PENH - Cambodian conglomerate Ly Yong Phat Group (LYP Group) and China Minsheng Investment Group (CMIG) signed a $1.5 billion deal on Thursday to build a Cambodia-China Friendship City in Phnom Penh's northern suburb.

The deal was inked between Ly Yong Phat, president of LYP Group and senator of the ruling Cambodian People's Party, and Peng Xinkuang, executive president of Chinese property developer SRE Group, which is controlled by CMIG,?on the sidelines of the Cambodia-China business forum, which was attended by some 600 business executives and officials from the two countries.

Under the agreement, the two conglomerates will develop the Cambodia-China Friendship City on the parcel of 550 hectares in a 2,000-hectare satellite city that the LYP Group is building on the northern outskirts of Phnom Penh.

The project, expected to begin next year, will include a convention center, hotels, a golf course, schools, logistics centers and amusement parks, said LYP Group's managing director Seng Nhak.

"We partner with the CMIG to build an international standard city," he said in a press conference before the signing ceremony. "A safari park, a water park and a water fountain similar to that in the Sentosa in Singapore will be developed in the planned city."

Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia, said the Cambodian government fully supported the project because it was in line with the government's Phnom Penh expansion strategy.

"It will be a modern and green city," he told the press conference. "I believe that the friendship city will improve the quality of living for people."

The secretary-general said that the forum and the signing ceremony of the mega-project were the result of the fruitful state visit of Chinese President Xi Jinping to Cambodia in mid-October.