Chinese battery giant China Aviation Lithium Battery (CALB), which is based in Changzhou, has contracted Portuguese construction firm Mota-Engil for the initial phase of its gigafactory development in Sines, Portugal. The deal is valued at €207.3 million (US$225.6 million), according to a Portuguese media report.

The agreement covers the construction of a lithium-ion battery plant, located on Portugal’s Alentejo coast, a project that is strategically aligned with Europe’s larger goals for energy transition and electric vehicle adoption.

CALB has scheduled the start of construction for later this year. According to filings with Portugal’s Securities Market Commission, the building phase is anticipated to last 22 months.

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The project encompasses a total area of around 17 hectares, with a construction area of approximately 62,000 square metres. Mota-Engil’s remit includes the erection of buildings, technical apparatus, and the installation of industrial machinery and associated cabling systems.

To oversee the work, CALB has brought in the Chinese company ShineWing to coordinate operations. The Portuguese firm Purever, which supplies equipment to battery manufacturing plants, has also been appointed to the project.

The facility is expected to deliver a significant boost to the Portuguese economy. Once fully operational, the plant is forecast to create about 1,800 direct jobs. Its potential economic output is considerable, possibly reaching more than 4 percent of Portugal’s GDP by some estimates.