Czech energy firm CEZ and Electrabel, a unit of French-based GDF Suez, won contracts to build two coal-fired power plants in Romania, the government said Wednesday.

Each contract is worth up to 400 million euros (590 million dollars), Economy Minister Varujan Vosganian said.

The 400-megawatt units in eastern Romania will be built at two existing power plants in cooperation with state-owned utility Termoelectrica SA.

Electrabel was contracted to build a unit at Borzesti and CEZ was tapped for one at Galati, also the site of Romania's biggest steelworks.

Romania plans to invest up to 3.5 billion euros into new or modernized thermoelectric plants over the next few years, Vosganian told reporters.

Fossil fuels account for about 54 per cent of electricity generation in Romania, an ex-communist country that joined the European Union last year.