VIENTIANE - Lao government has given the green light for a Chinese company to conduct a feasibility study on developing the Khonphapheng Special Economic Zone (SEZ) in southern Laos' Champassak province, local media reported on Tuesday.

The Chinese company had informed authorities that it wants to invest $10 billion to develop the SEZ, some 580 km south of capital Vientiane, the Deputy Governor of Champassak, Buasone Vongsongkhone told Lao state-run media Vientiane Times.

If the project is realized, it will become the largest investment venture in Champassak province and potentially the country.

A memorandum of understanding was recently signed between the government and the Chinese company, Guangdong Yellow River Industrial Group, in Vientiane, Vientiane Times online reported Tuesday. The move will allow the company to conduct a feasibility study for this project as well as project designs and other activities within six months.

"If the study is positive, we can move forward on a concession agreement which will allow the company to develop the project," Buasone said on Monday.

Khonphapheng waterfall and the surrounding area are designated for development as a new town that will focus on tourism.

The Chinese company's study will identify business activities and tourism facilities to facilitate the growth of tourism in Laos. This would include hotels, restaurants, a trade center and other tourism-related businesses.

In July 2015, the government approved the development of Khonphapheng and the surrounding area, also known as Siphandone (the 4,000 islands region), as a new SEZ.

Even before the government's approval, investors from China, South Korea, Singapore and the Philippines had expressed initial interest in the zone.

Khonphapheng, located in Khong district, is the largest waterfall in Southeast Asia and attracts thousands of visitors every year. Nevertheless, more facilities are needed to attract more tourists.

Officials said the waterfall, close to the Laos-Cambodia border, is a suitable location for developing the SEZ as it would bring more businesses to the area.

The provincial authorities have allocated more than 7,000 hectares for the potential development, which would be divided into four zones: Zone A (480 hectares), Zone B (797 hectares), Zone C (2,120 hectares) and Zone D (3,678 hectares).