Posco has signed an initial agreement with General Electric Co. to cooperate in energy development overseas and power plant business.

Under the pact, Posco expects to build and operate power plants in a joint project with GE, while the U.S. company will supply core equipment such as turbines and boilers for the plants.

Posco acquired Daewoo International Corp. in late 2010 to strengthen its presence in resources-development and power-plant markets, the company said in a statement.

The South Korean steelmaker also expects to engage in joint efforts with GE to develop high-end steel products used in oil-and-gas-drilling offshore facilities, said the statement.