Drought-stricken Mozambique will start building its first large scale solar plant in early 2017, after Scatec Solar, which owns several such plants in Africa, signed an $80 million deal to sell electricity to the state-owned energy company for 25 years. The 40MW plant will deliver power to the national grid and produce energy for some 175,000 households, Oslo-based Scatec Solar said in a statement on Tuesday. "The project is the first large scale solar plant to be built in the country and represents an important first step in realizing Mozambique's ambition to increase renewable power generation in its energy mix," it said. Mozambique has been hit by the worst drought in 35 years, which has reduced water levels in its huge Cahora Bassa hydroelectric dam. Some 1.5 million hungry people in the impoverished southern African country are in need of aid, the United Nations says. The solar project is backed by the World Bank's private-sector lending arm, the International Finance Corporation, and the public-private Emerging Africa Infrastructure Fund. The plant will be built near the city of Mocuba in Mozambique's central, coastal Zambézia Province. "This is an excellent example of how private public partnerships can deliver renewable energy and support further economic growth in Mozambique," Scatec Solar's chief executive Raymond Carlsen said. "It paves the way for further investments in renewable energy in the country." Only three percent of the world's electricity is generated in Africa, Scatec Solar said. The company also owns solar plants in South Africa and Rwanda, with others under development in Mali, Nigeria and Kenya.