Finavera Renewables, the Irish natural energy company, plans to invest $40 million (€31.26 million) in a wave energy project off the coast of South Africa.

Chief executive Jason Bak committed Finavera to the five-year project at the Clinton Global Initiative conference in New York, which was organised by former US president Bill Clinton. British billionaire Richard Branson pledged at the same event to donate $3 billion to tackle climate change.

Mr Bak said the 20 megawatt offshore plant would help address frequent brownouts (voltage reductions) in the South African electricity system and help create a more sustainable energy model for developing states.

"The Clinton Global Initiative is a call to action resulting in the formation of specific plans to address the world's foremost challenges," he said.

"As a renewable energy developer, we have taken the initiative to effect change and move ourselves aggressively towards a sustainable ocean energy source," he said.

Finavera agreed a reverse takeover last June with the Canadian exploration group Cascade Minerals.

It is making the South African investment through wave power specialist AquaEnergy which it acquired for $9 million days after the Cascade deal.

The South African project will generate more than 30 million kilowatt-hours of electricity per month, save $2 million per year in fuel and avoid some 20,000 tonnes of CO2 emissions.

"A material percentage of the return from the project will be used to alleviate energy poverty and will provide economic benefits to local communities through the creation of jobs," it said.

"Southern Africa suffers from intermittent power disruptions and a serious power crisis is expected to affect much of the region by 2007 if investments in new energy are not made.

"With South African energy demand projected to double over the next 10 years, the government has made a commitment to satisfy a portion of that demand with clean energy sources."