The plant will be run by the Sri Lanka Sustainable Energy Authority, which licenses and promotes renewable energy use in the country, after it is built by Korea.
The Korean International Co-operation Agency will give 4.5 million US dollars as an outright grant, power ministry secretary M M C Ferdinando told reporters.
The SLSEA will sell the power to the Ceylon Electricity Board, a state-run grid operator and use the revenue to promote rural electrification.
"The project will start this year and we plan to get it operational within one year," Ferdinando said.
The sustainable energy authority says Sri Lanka has an average solar insolation (a measure of solar energy received on a given area over period) of 5.
0 kiloWatt-hours per square meter per day.
Solar technology is still expensive compared to other renewables like hydros.
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But the technology is expected to become cheaper with time.
The plant will be built at Buruthakanda in Hambantota in Sri Lanka's dry arid zone.
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