A windfarm billed as the biggest in sub-Saharan Africa has been opened by Ethiopia's prime minister, Hailemariam Desalegn, a potentially crucial step for the continent's renewable energy industry.

The €210m (£179m) Ashegoda windfarm consists of 84 hi-tech turbines towering above an arid region where villagers herd cattle and ride donkey-drawn carts as they have for generations.

The project, outside Mekelle in Tigray state, about 475 miles north of the capital, Addis Ababa, has a capacity of 120MW and will produce about 400m KWh a year. It was completed in phases over three and a half years and has produced 90m KWh for the national grid.

The farm, inaugurated by Desalegn on Saturday, was supervised by German company Lahmeyer International and implemented by France's Vergnet with French funding. But the Ethiopian government insisted there were also local spin-offs.

"The project has provided very important experience-sharing for Ethiopia's national companies, who have been involved in the construction of civil works such as geotechnical investigations, roads, turbine foundations, sub-station erection and electro-mechanical erection works," it said.

Media reports in 2011, however, noted that about 700 farmers had lost some or all their land to make way for the turbines. They were given financial compensation but some complained the money was too little.

Ethiopia aims to become the region's leading producer of renewable energy. In the past two years it has built two smaller wind farms near Adama, south-east of Addis Ababa, with a capacity of 51MW each. It urgently needs new energy to feed economic growth that has averaged more than 10% over the past decade. Power cuts are still a regular occurrence in major cities and about half the country still has no access to mains electricity.

The government plans to build a "climate resilient" economy by 2025 (pdf), with adequate energy even if hydro power runs short because of reduced rainfall. A study by Chinese firm Hydrochina confirmed the high potential for wind power in the northern and southern parts of Ethiopia, particularly in the Somali region, with a huge estimated wind energy potential of 1.3m MW, according to Reuters.

Ruth Mhlanga, a climate and energy campaigner for Greenpeace Africa, welcomed the Ashegoda windfarm development. "We need an increase in renewable energy access on the continent, so the fact Ethiopia is investing is really good," she said, adding a cautionary note that measures are needed to ensure the use of more local manufacturing and expertise.

More than two-thirds of the population of sub-Saharan Africa is without electricity, and more than 85% of those living in rural areas lack access.

In June, Barack Obama announced a $7bn (£4.33bn) initiative to double access, citing the potential to develop clean geothermal, hydro, wind and solar energy.