Sydney - German renewable-energy company Conergy AG on Tuesday announced plans to build Australia's largest wind farm in a 50-50 joint venture with local financial powerhouse Macquarie Bank.

The 500-turbine installation at Broken Hill in the continent's south-east corner would produce enough electricity for 400 000 homes and save greenhouse gas emissions of three million tons of carbon dioxide a year.

"Silverton Wind Farm will be one of the largest in the world once it's operational, with the potential for almost 1 000 megawatts of renewable energy capacity," said Andrew Durran, executive director of Hamburg-based Conergy's Australian subsidiary, Epuron.

Construction of the wind farm could begin this year and when fully operational it could be meeting 4,5 percent of electricity demand in New South Wales, Australia's most populous state.

"If the demand is there we could accelerate the building and complete it in three years, otherwise we can slow down and complete it over four to five years," Durran said. "It has an excellent wind resource, it has a very strong transmission system and it has got the largest energy load."

Giving added impetus to the A$2,5-billion (about R14-billion) project is the new Labor government's target of 20 percent of Australia's power being generated from renewable sources by 2050. Currently more than 80 per cent of electricity is generated at coal-powered stations with most of the remainder coming from hydro-power stations.

Four landowners near Silverton, 25 kilometres from Broken Hill, in western New South Wales, have already agreed to host the installation.

The proposal is to build windmills along a series of ridges outside Silverton.

The tourist town of Silverton is best known for its iconic Outback pub, which featured in the Mel Gibson film Mad Max II and in lots of television commercials. It's a barren, windswept stretch and home to just a few hundred people.

"The townspeople in the area recognise the jobs and economic benefits from this project," Durran said. "They also recognise that to date their towns have relied on mining as an income source. This provides a new income source for the region."

Broken Hill, 1 170 kilometres from Sydney and 500 kilometres from Adelaide, is the birthplace of Broken Hill Proprietary (BHP), the world's biggest mining company. The deposits of silver, lead and zinc - once the world's largest - are now almost finished and the 20 000 people of Broken Hill have come to rely on the tourist trade for their livelihood.

The town's main street boasted the ornate Mario's Palace Hotel, where the drinking competition in the iconic Australian film The Adventures of Priscilla, Queen of the Desert was shot. It closed last year. - Sapa-DPA