Huawei Digital Power signed an agreement on Thursday with the local government of the southern metropolis of Shenzhen, where its parent is headquartered, for the project, the 21st Century Herald newspaper reported.

The signing was part of a larger event held by Shenzhen to mark the launch of new construction projects in the city, it said.

The 21st Century Herald said that Huawei's project was conducive to promoting the 'dual carbon' supply chain, referring to China's goal of reaching its carbon emissions peak before 2030 and becoming "carbon neutral" before 2060.

Huawei did not respond to a request for comment on the agreement.

Huawei has been trying to diversity its portfolio beyond its core telecoms and smartphone businesses, which have been hit hard in recent years by U.S. export restrictions.

Huawei Digital Power was registered last June under the name of the parent company's current rotating chairman, Ken Hu.

It was created to face "the challenges of the era of big data, traffic, and energy consumption", providing solutions such as smart data centres and helping telecom and tower operators achieve "green efficiency", according to the company website.

In January, Huawei Digital Power and China Resources Power Holdings Co Ltd (0836.HK), which operates coal-fired power plants across China, signed a cooperation agreement to develop clean energy projects such as big data platforms for solar panels, energy storage systems, and smart power plants.

($1 = 6.3239 Chinese yuan renminbi)