Tanzania will begin construction of a $120 million wind power project early next year to curb chronic energy shortages in east Africa's second-biggest economy, a senior government official said on Tuesday.

Prolonged drought at hydropower stations and rising fuel prices have resulted in acute energy shortfalls, forcing the state-run power utility to introduce rolling blackouts.

Construction of the first-ever wind power station in the country, in the central town of Singida, will add some 50 megawatts of electricity to the national power grid.

The financiers of the project have already given the go-ahead after looking at all the relevant studies. We expect the construction work to start at the earliest in February,' Tanzania's deputy minister for Industry and Trade, Lazaro Nyalandu, told Reuters.

The state-run National Development Corporation (NDC) holds a 51 percent stake in the project and a privately owned company, Power Pool East Africa Limited, retains the rest. The details of the financing were not immediately available.

'It's a 15-month project, so we expect the first 50 megawatts of electricity to start being generated by the year 2012,' Nyalandu said.

The country produces most of its electricity from hydro dams and generates close to 300 MW using natural gas from a deposit on Songosongo island off the coast.-Reuters