AsianFin -- Tesla has signed a 4 billion yuan ($556.8 million) agreement to develop its first grid-scale energy storage project in China, local media outlet Yicai reported Friday. 

The large-scale energy storage station—powered by Tesla’s Megapack batteries—will be built in Shanghai, marking a major step in the company’s push to expand its energy business in China.

The deal was inked between Tesla, China Kangfu International Leasing Co., and the Shanghai municipal government. It comes just months after Tesla’s Megapack battery megafactory in Shanghai began operations in February.