ROARING 40s Renewable Energy Pty, a venture between Hydro Tasmania and CLP Holdings Ltd, has agreed with China Datang Corp to build what may be one of the world's largest onshore wind farms.

The partners will develop the 1,000-megawatt Xiangyang project in stages, with the first 400-megawatt stage to be built early next year, David Llewellyn, minister for energy in the Australian state of Tasmania, said in a statement late on Tuesday.

The project will cost A$640 million (US$533 million), Bloomberg News reported.

China is encouraging wind power to help overcome energy shortages created by a doubling in the size of the economy since 2001.

The government plans to increase wind-power capacity fivefold by 2010 from the end of 2005. The project will be Roaring 40s' seventh wind project in China. "This one project will develop more wind energy than Australia's entire installed wind energy capacity," Llewellyn said