Dongyang Engineering and Construction Corp said it and Germany's SunTechnics would complete the plant at a site about 400 kilometres (250 miles) southwest of Seoul by November 2008.

It said the plant will have a capacity of 20 megawatts, nearly twice that of Germany's Bavaria solar power station which is currently the world's biggest and generates 11 megawatts.

Dongyang said it will invest a total of 157.6 billion won (169 million dollars) to build the station, which will provide electricity to 6,000 households.

The company said it plans to operate the station for 15 years after completion to gain expertise on solar power generation from SunTechnics.

Demand for eco-friendly reusable energy is high in South Korea, the world's 11th largest economy, which imports all its oil needs.

In December it opened what it called the world's largest garbage-fuelled power plant using methane gas for fuel.

Nuclear plants provide 40 percent of the country's electricity needs.