On his second day in Regina, Prime Minister Justin Trudeau announced funding for a new geothermal power plant near Estevan.

The federal government will provide $25.6 million in funding for a five Megawatt facility, which will produce enough energy to power about 5,000 homes while taking the equivalent of the yearly emission of 7,400 cars out of the atmosphere.

"By investing in this specific project we're helping to develop a system that'll produce clean, renewable energy to help power the province," Trudeau said.

The project will be led by DEEP Earth Energy Production Corporation and will be the first of its kind in Canada. The project is expected to cost $51.3 million.

"The funding announced today is critical to the success of this first geothermal power project," said DEEP Earth president and CEO Kristen Marcia.

"It's funding like this paired with equity investments from Canadians that helped launch new, innovative, clean energy projects that will reduce our greenhouse gas emissions and create jobs."

This project is expected to create 100 jobs during construction while tapping into clean, renewable energy.

In November, DEEP Earth announced their first geothermal well began operation in the Torquay area and is currently the only well in Saskatchewan.

Estevan mayor Roy Ludwig said the city is excited about the project and welcomes the funding announced by the federal government.

"We have supported this project 100 per cent so now to see that the federal government is tossing their support along with money behind it to make it happen, we are absolutely thrilled about it," Ludwig said.

The new power plant is expandable to 200 Megawatts; however more wells would be needed.

Currently there are four coal burning units in Saskatchewan producing between 150 to 300 Megawatts of energy.

Geothermal energy in the process of bringing hot water around 120 degrees Celsius to the surface and converting it to energy.