A $200-million Danish-Canadian solar power project in Alberta is headed for construction following signing of a contract with TC Energy Corp., which will buy just over half of its electricity output.

Calgary-based Perimeter Solar Inc. says TC Energy (formerly TransCanada Corp.) has agreed to purchase 74.25 megawatts of electricity from the proposed 130-MW Claresholm Solar project located about 125 kilometres south of Calgary.

It says delivery of energy will begin with commercial operation of the project, which is targeted for the end of September 2020.

Obton A/S of Denmark, which bought a 49 per cent interest in Perimeter in June 2017, is to provide funding for construction, which is to begin before year-end on land owned by the Granum Hutterite colony near the town of Claresholm.

The partners credited Alberta's unregulated electricity market for their decision to proceed, noting in a news release the project will produce power during the day when demand and power pool prices tend to be the highest.

TC says the project will add to the 450 MW of electricity it currently operates and markets in Alberta.