A 138-megawatt wind farm is set for construction near St. Joseph, Man. (Government of Manitoba)

A wind farm to be built near the community of St. Joseph in southern Manitoba is expected to provide clean, renewable energy to 50,000 homes.

Construction on the 138-megawatt wind project — the second major one in the province — will begin immediately, Premier Greg Selinger announced Monday.

"The construction of the second major wind farm in this province is an exciting and significant step," he said.

The project's go-ahead was made possible because of a 27-year power purchase deal between Manitoba Hydro and San Francisco-based Pattern Energy Group.

Pattern will invest $95 million and Manitoba Hydro will loan the company up to $260 million to be repaid over 20 years.

The total cost of the wind farm, which will be located about 100 kilometres south of Winnipeg, is estimated to be $345 million.

The first wind turbines are expected to be producing electricity by the end of the year.

When finished in the spring of 2011, there will be 60 wind turbines covering an area of 125 square kilometres in the rural municipalities of Montcalm and Rhineland.

The project is a downsized version of one the provincial government and Hydro were touting back in 2008. At that time, the proposal was for a 300-megawatt farm and would have been the largest in Canada.

That deal, however, fell through when the economy went into a tailspin.

The loan guarantee to Pattern Energy was necessary to revive the project, the government said.

Manitoba's other wind farm is located near St. Leon, about 125 kilometres southwest of Winnipeg. The 100-megawatt farm became operational in 2006.

With files from The Canadian Press