The panels, which will be raised around 2 metres off the ground in an area dotted with olive groves, will produce 11 megawatts of electricity, or enough to supply 8,000 homes.

The plant is expected to be ready in January 2007 and will have 52,000 photovoltaic modules.

It is near the town of Serpa, 125 miles (200 km) southeast of Lisbon and in the heart of Portugal's Alentejo, an overwhelmingly poor agricultural region and one of the sunniest spots in Europe.

The scheme fits into Portugal's plans of reducing its reliance on imported energy and cutting output of greenhouse gases that feed global warming. Portugal's emissions have surged about 37 percent since 1990, one of the highest increases in the world.

"The Serpa solar power project, along with other renewable energy initiatives, helps lay the foundation for Portugal's energy future," said Piero del Maso, joint chief executive of Catavento, a Portuguese renewable energy company involved in the project.

"Serpa must not be a single case but a true starting point for solar power in Portugal."

Although the plant will only create five or six new jobs -- the solar panels will be shipped in -- GE hopes the plant will bring benefits.