The 500-megawatt plant, expected to be complete by 2009, is part of Abu Dhabi's drive to reduce dependence on hydrocarbon power, Sultan al-Jaber, chief executive of Abu Dhabi Future Energy Company, said said on Sunday.
Future Energy, a subsidiary of government-owned Mubadala Development Company, and the Abu Dhabi Water & Electricity Authority will fund the plant with other investors.
Economic development
The emirate eventually hopes to provide solar-powered electricity to 10,000 homes and is setting up a special economic zone for the alternative-energy industry, Jaber said.
He said: "We ... do not want to be 100 per cent dependent on (hydrocarbon power).
"We have an economic development programme dedicated to establishing an entirely new economic sector focused on alternative energy and sustainable technologies," he said.
Jaber said the plant will be the first of its kind in the Gulf, home to oil and gas producers who supply a fifth of the world's energy needs.