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Like many countries across Africa, Cameroon is in a race to expand power production to ensure the lack of supply does not further constrain economic growth. It currently produces just 933 MW of power.
The solar plant is part of plans by Cameroon to spend 6 trillion CFA francs to more than triple electricity production to 3 000 MW by 2020 through a mix of hydro, thermal and solar projects.
Last week it revised its 2013 economic growth forecast down to 4.8%, partly blaming power cuts for missing the figure of 5.5% initially set for the year.
A consortium led by South Africa's GSC Energy signed a memorandum of understanding with Cameroon to develop the plant at a fee "significantly" less than current electricity providers, the company said on Wednesday.
A feasibility study is due to start in three weeks and construction could begin within 18 months of that being completed, Steven Moti, chairperson of GSC Holdings, which owns GSC Energy, told Reuters.
The project will be financed through a mixture of debt and equity, Moti added, without giving details.
Moti would not say how much the electricity produced by the solar project would cost, saying only it would be "significantly lower" than current costs.
"Our aim is to supply energy at an affordable rate. We have done our sums and we are encouraged," he said.
"We know the challenges we all face (in Africa) ... If you don't have a reliable power supply, you are going to have challenges for the economy."
Cameroon is rich in natural resources ranging from oil and minerals to fertile land and rivers, but experts say mismanagement and under-investment mean it has consistently failed to live up to its potential.
Firms involved in the project with GSC include Italy's PLC System, Germany's Sun Value GmbH, South Africa's Consolidated Power Projects and Canadian-South African Hatch Goba.
